World Bank approves USD 1.5 bn loan to support India’s reforms, job creation
The funding provided under the Private Sector Development Policy Financing (DPF) Operation Enhancing Employment Creation is expected to support reforms that could create employment opportunities for the 11 million young Indians who will join the workforce in the next two decades.
The World Bank said on Monday that the program builds on reforms undertaken in recent years, including tax simplification, trade integration, regulatory changes and measures to improve the business environment.
He added that the DPF supports initiatives to reduce barriers to entrepreneurship, strengthen labor market participation, especially among women, facilitate trade and investment processes, and improve access to capital for businesses.
In November 2025, the government consolidated 29 labor laws into four comprehensive Labor Laws that aim to simplify compliance, modernize outdated provisions, and create a more efficient framework for businesses while protecting workers’ rights.
Employment in India rose from 452 million in 2017-18 to 604 million in 2023-24, adding more than 150 million jobs in six years, according to government estimates. During the same period, the unemployment rate decreased from 6 percent to 3.2 percent, while approximately 9 million women participated in regular paid employment.
It was stated that the reforms reflect India’s shift towards results-oriented management focusing on transparency, predictability and long-term economic resilience. The operation is aligned with the World Bank Group’s Country Partnership Framework for India for FY 26-31 and supports the government’s Viksit Bharat 2047 vision by improving the environment for firms, encouraging private investment and expanding productive employment opportunities, it said.
It was stated that the program will focus on three key areas: improving the business enabling environment, promoting trade and investment openness, and mobilizing private capital for business expansion and job creation.
“India has made good progress on its reform agenda to unlock private capital and create jobs in a challenging global context,” said Johannes Zutt, World Bank Vice President for South Asia.
The DPF also complements recent investments by the International Finance Corporation (IFC), the private sector arm of the World Bank Group, to increase credit access for underserved communities, including MSMEs and women in rural and semi-urban areas.
