The union cabinet on Saturday approved a slew of infrastructure and welfare measures with a total outlay of over ₹1.28 lakh crore, including a sovereign-backed maritime insurance pool, expansion of rural roads, railway capacity upgrades and an increase in dearness allowance for central government employees.

The decisions, taken amid evolving global and domestic economic conditions, are aimed at strengthening trade resilience, boosting rural connectivity and improving logistics infrastructure.

Maritime insurance pool

Among the key decisions, the cabinet approved the creation of a ‘Bharat Maritime Insurance Pool’ with a sovereign guarantee of ₹12,980 crore, aimed at ensuring uninterrupted insurance coverage for India’s shipping sector.

The move comes against the backdrop of rising geopolitical tensions in West Asia, which have disrupted shipping operations, pushed up premiums and forced insurers to adopt a case-by-case approach to coverage approvals.

The proposed pool will cover a wide range of maritime risks, including hull and machinery, cargo, protection and indemnity (P&I), and war risks. It will extend coverage to Indian-flagged and controlled vessels, as well as ships carrying cargo to and from Indian ports.

Officials said the initiative would help ensure continuity of insurance, reduce dependence on foreign insurers and lower foreign exchange outgo on premium payments.

The pool is proposed for an initial period of 10 years, extendable up to 15 years, indicating a long-term policy shift in managing maritime risks.

₹83,977 crore boost for rural roads

The cabinet also approved the continuation of Pradhan Mantri Gram Sadak Yojana (PMGSY) Phase III with an enhanced outlay of ₹83,977 crore.

The scheme, one of India’s largest rural infrastructure programmes, focuses on providing all-weather road connectivity to unconnected habitations and improving access to markets, schools and healthcare facilities. The extension is expected to ensure that ongoing projects are completed without disruption, while also supporting rural economic activity and employment generation.

Railway capacity expansion projects cleared

Two major railway projects were also approved to ease congestion and improve freight movement:

• Ghaziabad–Sitapur 3rd and 4th line (403 km) at a cost of ₹14,926 crore

These projects are aimed at enhancing connectivity across key industrial and port corridors, improving logistics efficiency and supporting faster movement of both passenger and freight trains.

Dearness allowance hiked for govt employees

In a relief for central government employees and pensioners, the cabinet approved a 2% increase in dearness allowance (DA) and dearness relief (DR), taking it to 60% of basic pay, effective January 1, 2026.

The move is expected to benefit over 50 lakh employees and nearly 68 lakh pensioners, with an annual financial implication of around ₹6,791 crore.