Put private sector at center of development agenda: Sitharaman to World Bank

New Delhi: Finance minister Nirmala Sitharaman on Thursday called on the World Bank Group to keep the private sector at the centre of its development agenda, stressing that mobilising private investment is essential as most jobs will be created by private enterprises.

Speaking at the 114th meeting of the Development Committee Plenary in Bangkok, Sitharaman said sustainable job creation requires ecosystems built on macroeconomic stability, infrastructure, simple regulations and access to finance, according to a late-evening statement by the Indian finance ministry.

The meeting of the Development Committee, a joint ministerial forum of the World Bank and the International Monetary Fund, is being held during the 2026 Annual Meetings of both the multilateral institutions in Bangkok between 12 and 18 October. The plenary agenda was ‘Private Capital Mobilisation and Jobs’.

Job creation remains a key priority, the World Bank has said, noting earlier this year that 1.2 billion young people in developing economies will reach working age over the next 10 to 15 years, while only around 420 million jobs are projected to be created. The private sector, it estimates, creates 9 out of 10 jobs in these economies.

“At a time of growing energy market stress, trade fragmentation, climate pressures, and rapid technological change, productive and better-paid jobs remain the most effective pathway to poverty reduction and shared prosperity,” Sitharaman said.

The minister made six points in India's intervention during the plenary.

First, jobs require ecosystems, not isolated interventions, she stressed. Last-mile connectivity to energy and job markets, large-scale physical and digital public infrastructure, financial inclusion and regulatory trust in market forces as critical for improving productivity and jobs at scale, she said.

Second, given that most jobs will be created by the private sector, including MSMEs and startups, success should be measured not by the volume of financing mobilised, but by outcomes--jobs created and rise in productivity.

She encouraged stronger collaboration among various World Bank entities — the International Bank for Reconstruction and Development, the International Finance Corporation and the Multilateral Investment Guarantee Agency — faster operationalization of the Bank’s Group Guarantee Platform, launched in 2024, to provide a single point of access to guaranteed products.

Developing economies are hemmed in by a scarcity of risk capital, and guarantees are among the most effective tools to crowd in private capital, she said.

The World Bank Group’s private capital mobilization has jumped from $35 billion in FY22 to $112 billion in FY26, and it has issued more than $25 billion in guarantees. In India alone, the group has helped mobilize a cumulative $36 billion over the past four years. However, the capital requirement of developing countries remains large.

Third, competitive financing must remain a core priority for the World Bank, she said. “The World Bank must remain a development partner through competitive pricing, tapping tools like local currency financing, stronger guarantee products, and lower transaction costs,” she added. Affordable, predictable, and accessible financing must remain and at the core of the multilateral lender’s Middle-Income strategy.

Fourth, the World’s Bank's knowledge bank must help address market failures in critical areas like urbanisation, tourism, agricultural exports and critical minerals, and give due attention to how artificial intelligence can boost state capacity in developing countries, she said.

“Fifth, we reiterate our longstanding concerns regarding Worldwide Governance Indicators and similar composite assessments,” she said.

“Given their far-reaching implications, there is a need for a comprehensive review and revision of existing methodologies to ensure that they are transparent, objective, evidence-based, and better aligned with current realities and the diverse development experiences of member countries,” Sitharaman added. This will be crucial to preserving the integrity of the Bank's knowledge products, she added.

Finally, the ultimate measure of success is whether reforms help countries create jobs, raise productivity, reduce poverty, and improve living standards, she stressed. “We also reiterate the importance of strengthening the voice and representation of developing countries in the governance architecture of the World Bank,” she said.

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