Mining baron Anil Agarwal today said the credit rating upgrade by Moody's strengthens India's attractiveness as an investment destination and it is a result of a slew of reforms initiated by the government.
The US-based Moody's yesterday upgraded India's sovereign credit rating by a notch to Baa2 from Baa3 with a stable outlook citing improved growth prospects driven by economic and institutional reforms.
"It is a proud moment for India. The slew of reforms by the government are finally taking shape," the chairman of Vedanta Resources said.
The upgrade further strengthens India's attractiveness as an investment destination, he said.
He further said Prime Minister Narendra Modi is spearheading a revolution and these systemic changes will revitalise growth and have a tremendous impact such as a recovery in investment cycle, more jobs, a broader tax net and sustained, long-term GDP growth rate.
One of the triggers for the ratings upgrade, he said, is the recapitalisation of the banking system.
However, the move would increase the government's debt burden modestly. This can be adequately offset by promoting domestic exploration and production of metals and minerals.
"Despite abundant deposits, India imports much of its resources, thereby leading to outflow of precious forex. A comprehensive energy and resources policy that encourages private sector participation in exploration and production would boost India's resources security, save billions of dollars for the country and above all create millions of jobs," he added.
Moody's had last upgraded India's rating to Baa3 in 2004, and this latest rating upgrade comes after a gap of 13 years.
In a statement, Moody's had said: "The decision to upgrade the ratings is underpinned by Moody's expectation that continued progress on economic and institutional reforms will, over time, enhance India's high growth potential and its large and stable financing base for government debt and will likely contribute to a gradual decline in the general government debt burden over the medium term.
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