World Bank approves $1.5 billion to support India's private sector-led job creation efforts

The World Bank has approved $1.5 billion as finance to support India’s structural reforms to boost private sector-led job creation and economic growth under the Boosting Job Creation in the Private Sector Development Policy Financing (DPF) Operation.

The DPF Operation can create job opportunities for the 1.1 crore youth who will be entering the labour market every year over the next two decades, an official release said.

The DPF Operation builds on many structural reforms undertaken or initiated in recent years, including tax simplification, trade integration, and legislative and regulatory reforms to improve ease of living and the ease of doing business. It also supports tax and regulatory reforms that reduce barriers to entrepreneurship, updates to the labour laws to make it easier for women to participate in formal employment, measures to streamline trade and investment regimes, and steps to facilitate capital mobilisation.

“India is well paced in its reforms agenda to unlock private capital and create jobs in a challenging global context,” said Johannes Zutt, Vice President for South Asia, World Bank. “By reducing the regulatory burden on firms, expanding market access, and improving access to finance, the operation creates conditions for Indian firms to scale, invest, and hire — directly generating quality jobs across sectors.”

“To foster job creation and entrepreneurship, the DPF supports measures to unlock financing particularly for micro, small and medium enterprises, as well as women-owned enterprises and underserved borrowers,” said Aurélien Kruse and Laurent Gonnet, task team leaders of the operation. “Improving MSME access to finance, will make firms and workers more resilient to shocks and better able to seize economic opportunities.”

The new operation supports India’s reforms in three critical areas: enhancing the business-enabling environment, advancing trade and investment openness, and mobilizing private capital for firm expansion and job creation.

The DPF also complements recent investments by the World Bank Group through the International Finance Corporation (IFC) to leverage private capital for MSMEs and to expand credit access for underserved borrowers in rural and semi urban areas, especially women.

These include: an equity investment of approximately $97 million in Aditya Birla Capital Limited, a $100 million debt investment in L&T Finance Limited, a debt investment of approximately $150 million in HDB Financial Services, and a $242 million (of which $191 million is private mobilisation) to private equity firm Everstone Capital Partners Fund V to support mid-market companies.

The DPF is aligned with the World Bank Group’s Country Partnership Framework (CPF) for India for FY26-31, anchored in the Government of India’s Viksit Bharat @2047 vision, which supports improving the enabling environment for firms, mobilising private investment, and expanding productive job opportunities, particularly for women and youth.