World Bank Group Provides New Financing in Support of India’s Reform Program to Boost Growth and Jobs

WASHINGTON, June 18, 2026-The World Bank's Board of Executive Directors today approved $1.5 billion in financing 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 11 million youth who will be entering the labor market every year over the next two decades.

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. The operation also supports tax and regulatory reforms that reduce barriers to entrepreneurship, updates to the labor laws to make it easier for women to participate in formal employment, measures to streamline trade and investment regimes, and steps to facilitate capital mobilization. In recent years, economic reforms in India reflect a maturing phase of India's governance, from expanding regulatory frameworks to delivering measurable outcomes with focus on simplifying systems, reducing compliance burdens, and improving predictability for citizens and businesses. From simplified tax regime and Next-Generation GST, expanded and more inclusive MSME definitions, and business compliance, reforms were designed to make everyday economic interactions smoother, faster, and more transparent, strengthening policy certainty and trust in institutions. Collectively, these measures illustrate a governance approach rooted in outcome-driven policymaking, fostering trust, predictability, and long-term economic resilience.

In November 2025, the Government of India laid a strong foundation for a more equitable, transparent, and growth-oriented economy with consolidation of 29 labor laws into four comprehensive Labor Codes to streamline compliance, modernize outdated provisions, and create a simplified, efficient framework that promotes ease of doing business while safeguarding workers' rights and welfare.

According to government estimates-and reflecting the vision of an empowered, prosperous, and Aatmanirbhar Bharat-employment in India has shown remarkable growth rising from 452 million in 2017-18 to 604 million in 2023-24, a net addition of over 150 million jobs in just six years. During the same period, the unemployment rate declined sharply from 6.0% to 3.2%, and around 9 million women entered the regular wage employment, underscoring the Government's emphasis on inclusive and sustained labor empowerment.

These steps reaffirm India's commitment to fostering a modern labor ecosystem that empowers both workers and industry, paving the way for inclusive and sustainable growth.

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, mobilizing private investment, and expanding productive job opportunities, particularly for women and youth.

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.

"India is well paced in its reforms agenda to unlock private capital and create jobs in a challenging global context," said Johannes Zutt, World Bank Vice President for South Asia. "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 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 mobilization) to private equity firm Everstone Capital Partners Fund V to support mid-market companies.