A report by the United Nations Development Programme highlights a major childcare gap in urban India and proposes a blended finance model to expand affordable childcare for low-income families. The initiative aims to boost women’s workforce participation while improving early childhood development.
A new report released by the United Nations Development Programme (UNDP) highlights a significant childcare gap in India’s cities and proposes a blended finance approach to expand affordable childcare services for low-income families. The report, titled “Expanding Access to Childcare in Urban India: A Blended Finance Approach,” was developed in collaboration with Dalberg Advisors and released on 10 March 2026.
According to the report, between 6 and 7 million women from low-income urban households currently need access to affordable childcare, yet existing public and private systems meet less than 10 percent of the demand. If India’s female labour force participation rises significantly in the coming decades, the demand for childcare could grow dramatically.
The study argues that expanding childcare access is not only a social welfare issue but also an economic priority that can strengthen women’s workforce participation and support early childhood development.
Blended Finance Model for Scalable Childcare
The report proposes blended finance as a viable pathway to scale childcare services in urban India. Under this model, funding would come from multiple sources including government budgets, philanthropic capital, employer contributions, and user fees. By combining these streams of funding, the model aims to create sustainable childcare infrastructure that remains affordable for low-income families.
Experts behind the report say this approach can help bridge the financing gap that currently limits childcare expansion. Estimates suggest that delivering quality childcare costs roughly ₹3,800 to ₹4,500 per child each month, while only 25–30 percent of this cost can realistically be recovered through user fees in low-income communities.
As a result, diversified financing models involving both public and private stakeholders are essential to scale services sustainably.
Two Models Proposed for Urban India
The UNDP-Dalberg report outlines two operational models designed specifically for urban settings.
The first is a hyperlocal, community-led childcare model, often referred to as a “carepreneur” model. In this system, trained caregivers from local communities operate childcare centres near residential areas. This approach is designed to make childcare accessible within neighbourhoods where working parents live.
The second model focuses on industry cluster-based childcare centres, particularly in areas with large numbers of micro, small and medium enterprises (MSMEs). These centres would be located near workplaces, allowing factory workers and informal sector employees to access childcare close to their jobs.
Together, these models aim to reduce barriers that prevent women from entering or remaining in the workforce.
Economic and Social Impact
The report emphasises that childcare services are an important component of the broader care economy and can generate long-term economic benefits. Lack of childcare is one of the key reasons many women remain outside the labour force.
Studies cited in the report indicate that a large proportion of women who are not employed cite childcare and domestic responsibilities as the main reason for staying out of work. Expanding childcare infrastructure could therefore unlock significant economic potential by enabling women to participate more fully in the labour market.
UNDP officials argue that childcare should be viewed as economic infrastructure, similar to transport or digital connectivity, because it directly affects workforce productivity and family well-being.
Aligning with Government Schemes
The report also highlights how the proposed financing models can complement existing government initiatives. Programmes such as Saksham Anganwadi, POSHAN 2.0, and the Palna Scheme under Mission Shakti have already laid the foundation for improving childcare access in India.
However, experts say additional partnerships with private companies, philanthropies, and civil society organisations are required to scale services across urban areas.
The blended finance model encourages employers and industries to contribute infrastructure and operational support, particularly in industrial clusters where many workers are parents of young children.
A Pathway for Inclusive Urban Growth
The report concludes that expanding childcare access is essential for achieving inclusive urban development and advancing gender equality in India’s workforce.
By bringing together government programmes, private sector participation, and community-led initiatives, the blended finance approach could help build a scalable childcare ecosystem in Indian cities.
UNDP notes that improving childcare services will not only support working families but also ensure better early childhood development outcomes, strengthen women’s economic empowerment, and contribute to India’s long-term growth.
As urbanisation accelerates and more families rely on dual incomes, the report argues that investing in childcare systems today will play a critical role in shaping India’s future labour force and economic resilience.
Clear Cut Research Desk
New Delhi, UPDATED: March 15, 2026 05:00 IST
Written By: Ayushman Meena
