You are asking a lot of questions in one. I'll try to tackle the overall question itself.
Is it normal to expect a software company to allow me to work two
hours less per day at the cost of reducing my Cost to Company
While more and more companies are offering "Flexible Work Arrangements" these days, I'm not sure it's quite become the norm yet (at least not in my part of the world - it may be different where you live).
In my company we just recently began a formal system where you could ask your manager for permission to reduce your hours. You would be expected to come up with a process where your modified arrangement would work out for the company. Your manager would have the ability to grant or reject your request for reduced hours.
In my company, you can also propose "job sharing". In that case, you would have to find someone else to work with you and basically split a single job across two people. I don't know anyone here who has actually done that yet.
Most companies I know do not offer these options on a formal basis. Still, in one previous company where I worked, I allowed one employee to remain with the company while going from full-time to part time (at the cost of both reduced salary and reduced benefits). I was able to bring in an additional part-timer to make up for the lost work and fill the gap. In that case it worked out well for everyone.
In my experience, larger companies tend to offer more job flexibility. And I've seen it more in technology companies than non-technology companies (although that may be more a function of the types of companies where I have worked). The companies that offer it generally don't seem to offer it for specific professions only (such as only for developers), as far as I can tell. If they offer these benefits to one role, they tend to offer them for all.
In your specific case, if you are working for a company, you should already know if this is a formal offering or not. Check with your HR rep or company manual. Pay careful attention to the point at which your benefits start to be reduced in addition to your salary, if you care about these benefits. Sometimes, reducing your hours by 10 per week would put you into a part-time category, and your benefits would decrease significantly.
Even if it isn't formally offered, ask your manager if such a thing is possible. Often, you can get more than you would think just by asking! The worst that could happen is that they say "No".
And if you aren't currently working, look for some sort of Flexible Work Arrangement as part of the benefits package when you apply for a position. Many companies that offer this, make it well known, as they view this as a way to attract talent.
Barring that, consider applying only for part-time positions.
Flexible work arrangements may not be as common in India as in the US. But, based on my more than 10 years experience working with Indian divisions of US companies, I know that it does happen. And in particular, I know that the company I currently work for, which has a large division in India composed of Software Developers along with others, permits such arrangements. Perhaps your specific company allows them as well.