World Bank Backs India’s Private Sector with $1.5 Billion Loan

The funding supports the Boosting Job Creation in the Private Sector Development Policy Financing operation, a strategic pivot designed to help businesses scale operations and absorb a rapidly growing labor pool. The program builds on recent structural shifts, including the November 2025 consolidation of 29 labor laws into four codes, which sought to balance employer flexibility with worker protections. By improving access to capital and refining the Goods and Services Tax framework, the government intends to foster a more predictable climate for domestic and international investors.

Official data suggests significant momentum, noting an increase in total employment from 452 million in 2017-18 to 604 million by 2023-24. During this period, the unemployment rate dropped from 6 percent to 3.2 percent, bolstered by an influx of nine million women into the formal wage economy. Johannes Zutt, World Bank Vice President for South Asia, noted that these reforms remain critical for attracting private capital despite a volatile global economic landscape. Aligned with the Viksit Bharat @2047 vision, the operation complements ongoing work by the International Finance Corporation to support micro, small, and medium enterprises across the country.