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The DA/DR hike will cost the exchequer ₹6,791.24 crore annually and benefit about 50.46 lakh central government employees and 68.27 lakh pensioners.
The DA/DR hike will help offset inflationary pressures for govt employees and pensioners,(PTI)New Delhi: The Union cabinet on Saturday approved a set of decisions spanning welfare support, infrastructure and strategic risk management.
The Cabinet cleared an additional instalment of dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners, raising the rate by 2 percentage points to 60% of basic pay/pension with effect from 1 January 2026, to help offset inflationary pressures, according to an official release. The move will cost the exchequer ₹6,791.24 crore annually and benefit about 50.46 lakh employees and 68.27 lakh pensioners.
It also approved the creation of a domestic maritime insurance mechanism—the Bharat Maritime Insurance Pool (BMI Pool)—backed by a sovereign guarantee of ₹12,980 crore. The move comes as global volatility, sanctions risks and conflict-related disruptions have increased uncertainty in marine insurance markets and pushed up premiums for vessels and cargo.
It will provide cover for Indian-flagged or controlled vessels, as well as ships carrying cargo from any international origin to Indian ports and vice versa, including those transiting sensitive or volatile maritime routes.
Policies will be issued by participating insurers using the combined underwriting capacity of the pool, estimated at around ₹950 crore.
In infrastructure, the cabinet approved the continuation of the Pradhan Mantri Gram Sadak Yojana-III (PMGSY-III) till March 2028, with a revised outlay of ₹83,977 crore. The scheme focuses on upgrading rural roads to connect habitations with agricultural markets, schools and hospitals. Timelines have been extended to March 2028 for roads and bridges in plain areas and roads in hilly regions, and to March 2029 for bridges in hilly areas.
“The extension of the timeline of PMGSY-III will enable the full realization of its intended socio-economic benefits by ensuring completion of targeted upgradation of rural roads,” the statement said.
The Cabinet Committee on Economic Affairs, which also met on Saturday, approved two projects under the ministry of railways with a total cost of around ₹24,815 crore. These projects include: Ghaziabad–Sitapur third and fourth line and Rajahmundry (Nidadavolu)–Visakhapatnam (Duvvada) third and fourth line.
About the Author
Harsh Kumar
Harsh Kumar is a policy reporter at Mint (HT Media Group), where he covers the Ministry of Commerce and Industry along with key departments of the Ministry of Finance, including the Department of Economic Affairs (DEA) and the Department of Financial Services (DFS). With over five years of experience in business and economic journalism, he has developed strong expertise in tracking policy developments and their wider economic impact.<br><br>He has previously worked with Business Standard, Moneycontrol, and Outlook Money, where he reported extensively on banking, financial services, and the broader economy. Over the years, he has built a reputation for delivering accurate, insightful, and impactful stories, supported by a keen eye for detail and a consistent track record of breaking exclusive news.<br><br>An alumnus of Jamia Millia Islamia, Harsh closely follows regulatory changes and key economic trends shaping India’s financial and industrial landscape. His reporting aims to simplify complex policy issues for a wider audience while maintaining depth and credibility.<br><br>Outside of work, he enjoys tracking policy developments, finding scoops, and travelling, reflecting his curiosity about how economic decisions shape everyday life.
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