Cabinet clears DA,DR hike and Bharat Maritime Insurance Pool

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Saturday approved an additional instalment of Dearness Allowance (DA) for Central government employees and Dearness Relief (DR) for pensioners, effective from January 1, 2026. The hike of 2 percentage points raises the DA and DR from the existing 58% to 60% of Basic Pay and Pension, aimed at offsetting the impact of rising prices. The decision is expected to benefit around 50.46 lakh Central government employees and 68.27 lakh pensioners. The annual financial implication of the increase is estimated at Rs 6,791.24 crore. The revision follows the accepted formula based on the recommendations of the 7th Central Pay Commission, which periodically adjusts allowances in line with inflation trends.
The Union Cabinet also approved the creation of the Bharat Maritime Insurance Pool (BMI Pool) with a sovereign guarantee of Rs12,980 crore, aimed at ensuring uninterrupted and affordable maritime insurance coverage for Indian trade. The move comes amid rising global volatility and geopolitical tensions that have increased risks for vessels and cargo, pushing up insurance costs and creating uncertainty around coverage. The domestic pool will provide insurance for ships carrying cargo to and from Indian ports, including those passing through high-risk maritime corridors, thereby reducing dependence on international insurers.
The BMI Pool will cover key maritime risks such as Hull and Machinery, Cargo, Protection and Indemnity (P&I), and war risk. It will serve Indian-flagged vessels as well as those operating in connection with Indian trade, with policies issued by participating insurers using a combined underwriting capacity of around ₹950 crore. 
The initiative is expected to strengthen India’s self-reliance in marine insurance, build domestic expertise in underwriting and claims management, and ensure continuity of coverage in case of global disruptions or sanctions. A governing body will oversee its operations, with the sovereign guarantee aimed at enhancing resilience and maintaining greater national control over critical trade infrastructure.

The Union Cabinet has given its approval for the continuation of Pradhan Mantri Gram Sadak Yojana-III (PMGSY-III) beyond March 2025 upto March 2028. It involves consolidation of Through Routes and Major Rural Links connecting habitations to Gramin Agricultural Markets (GrAMs), Higher Secondary Schools and Hospitals. The revised outlay of the scheme will be Rs.83,977 crore.