New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a 3 per cent hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, along with an allocation of ₹7,395 crore for the Pradhan Mantri Viksit Gram Swaraj Yojana.
The Cabinet also cleared two major manufacturing initiatives — the ₹10,000-crore Container Manufacturing Promotion Scheme and the ₹1,856.67-crore Khelo India Sports Goods Manufacturing Scheme — aimed at strengthening domestic production, reducing import dependence and generating employment.
The DA and DR hike will take effect from July 1, 2026, raising the rates from 60 per cent to 63 per cent of basic pay and pension. The decision is expected to benefit around 48.54 lakh central government employees and 68.71 lakh pensioners, covering more than 1.17 crore beneficiaries. The annual financial burden on the exchequer is estimated at ₹10,016.10 crore.
Information and Broadcasting Minister Ashwini Vaishnaw described the increase as a Diwali gift, saying it followed the accepted formula based on the recommendations of the Seventh Central Pay Commission.
The ₹7,395-crore PM Viksit Gram Swaraj Yojana seeks to strengthen panchayats through local-level planning, capacity-building and improved financial management. Under the scheme, panchayats will be encouraged to identify local resources and development priorities, prepare plans according to their needs and improve the utilisation of Finance Commission grants. Training for elected representatives and greater mobilisation of own-source revenue are also key components.
The Cabinet’s container manufacturing scheme, with an outlay of ₹10,000 crore up to 2039-40, aims to increase India’s annual domestic manufacturing capacity nearly tenfold to 7.5 lakh twenty-foot equivalent units (TEUs). It will support new manufacturing facilities and the expansion of existing units through financial assistance, interest subvention and testing and certification support.
The scheme is expected to create around 3,000 direct jobs and more than 50,000 indirect jobs, while helping establish India as a competitive manufacturing base for shipping containers and strengthening maritime logistics and supply chains.
Prime Minister Modi welcomed the approval, saying the initiative would provide a major boost to India’s maritime and logistics sector. He highlighted its potential to expand domestic capacity, improve the quality of locally manufactured containers and reduce dependence on imports.
The Cabinet also approved the Khelo India Sports Goods Manufacturing Scheme with an outlay of ₹1,856.67 crore for the period up to 2033-34. The programme aims to develop dedicated sports goods manufacturing zones, strengthen existing industrial clusters and promote research, innovation, skill development and quality certification.
The scheme is expected to attract investment, support micro, small and medium enterprises, create employment and improve the competitiveness of Indian sports goods in international markets.
