Whalesbook
Childcare Spending Soars as Social Security Code Nears
Indian corporations are substantially increasing their investments in childcare and daycare facilities, anticipating the implementation of the Social Security Code. A new survey reveals that 60% of companies have already allocated higher budgets for these benefits, effectively doubling their expenditure compared to three years ago.
Code Mandates Crèche Facilities
The forthcoming Social Security Code requires employers to provide crèche facilities. These must be situated near employees' residences or workplaces, within a 500-meter radius, and are designed to be gender-neutral, applying to all employees. This regulatory push is prompting a strategic reassessment of compliance and associated costs across India Inc.
HR Priorities Shift
Childcare support has emerged as a top HR practice for supporting working parents, ranking above additional paid leave and flexible work arrangements, according to a survey by ProEves, a leading aggregator for daycares and preschools. This indicates a broader trend in corporate human resources.
Strategic Imperative Beyond Compliance
HR experts suggest that this move transcends mere regulatory adherence. Employer-backed childcare is increasingly viewed as a critical tool for retaining talent, fostering diversity, and enhancing overall productivity. Companies are recognizing its strategic value in a competitive job market.
Budgetary Expansion
Ketika Kapoor, CEO of ProEves, noted that daycare and childcare benefits in India have seen manifold growth in prevalence and a doubling of budgets between 2022 and the current period. The Code on Social Security is seen as a significant government effort to dismantle childcare barriers, thereby encouraging greater workforce participation from parents, especially women. This initiative further reinforces the crèche clause in the Maternity Benefit Act of 2017.
Doubled Median Spend
In 2022, companies reported a median monthly daycare spend of ₹5,000 to ₹9,999 per child. This figure has now doubled, reflecting the heightened corporate commitment to employee support services. Companies surveyed span sectors including IT, BFSI, FMCG, manufacturing, and services.
Forward-Looking Policies
Myntra's CHRO, Govindraj MK, highlighted the company's long-standing provision of free in-house crèche facilities and childcare reimbursement. Neha Nambiar, HR head at IIFL Capital, stated that their company has adopted a gender-agnostic policy, acknowledging shared caregiving roles. IIFL Capital's childcare budgets have grown by approximately 1.5 times between 2023 and 2025, underscoring a consistent expansion in support.