Diwali delight for central employees as Cabinet approves 3% DA hike; 1.16 crore employees, pensioners to benefit

The Union Cabinet on Wednesday approved development schemes with a combined outlay of ₹29,267 crore, including a 3-percentage-point hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, ahead of Diwali. 

The DA and DR rates will increase from 60% to 63% of basic pay and pension, respectively, with effect from July 1, 2026. The revision will entail an additional annual expenditure of ₹10,016 crore for the government, according to figures presented by Union Minister Ashwini Vaishnaw. 

About 48 lakh central government employees and 68 lakh pensioners are expected to benefit from the increase. The revision follows the formula based on the recommendations of the 7th Central Pay Commission. 

The government revises DA and DR twice a year, usually in January and July, to compensate employees and pensioners for inflation. The previous revision, approved in April 2026, raised the rates by two percentage points to 60%. 

For employees and pensioners under the 6th Central Pay Commission pay scales, DA and DR will rise from 262% to 269% of basic pay, while those under the 5th Pay Commission scales will see an increase from 483% to 497%, effective July 1. 

₹10,000-crore scheme to boost container manufacturing 

The Cabinet approved the Container Manufacturing Promotion Scheme (CMPS), with a budgetary outlay of ₹10,000 crore until FY40, to establish a globally competitive container manufacturing ecosystem in India, reduce import dependence and strengthen maritime, and logistics supply chains. 

Announced in the Union Budget 2026-27, the scheme will support new manufacturing facilities and expansion of existing units. It includes ₹859 crore for interest subvention of 3% per annum on eligible term loans, ₹8,891 crore in operational expenditure assistance for containers manufactured to global shipping standards, and ₹150 crore for testing and certification facilities. 

The scheme aims to increase India's annual container manufacturing capacity nearly tenfold to 7.5 lakh twenty-foot equivalent units (TEUs), potentially positioning the country as a global export hub for shipping containers. It is expected to generate around 3,000 direct jobs and more than 50,000 indirect jobs while supporting ancillary industries such as specialised steel, corner castings, wooden frames, and paints. 

₹1,856-crore push for sports goods manufacturing 

The Cabinet also approved the Khelo India Sports Goods Manufacturing Scheme, with an outlay of ₹1,856.67 crore for the period up to FY34, to strengthen domestic manufacturing, attract investment, and expand exports. 

The scheme will support the development of dedicated Sports Goods Manufacturing Zones, bringing manufacturers, suppliers, testing facilities, design centres and ancillary businesses together. These zones will leverage existing industrial infrastructure, including facilities under the BHAVYA Scheme and NICDC Industrial Parks. 

A combined ₹1,130 crore has been earmarked for anchor investment support and turnover-linked incentives to encourage new manufacturing facilities, expand production, and attract domestic and international players. 

The scheme will also support the upgrading of existing manufacturing clusters and provide ₹105 crore for obtaining and renewing certifications from international sports federations. The measures are intended to improve product quality and help Indian manufacturers access global markets. 

Focus on research, skills, and exports 

The scheme will promote research and development through Centres of Excellence at leading educational and research institutions, with a focus on sports equipment, material sciences, protective gear, and advanced manufacturing technologies. Start-ups will receive support to develop, test and commercialise new products and technologies. 

Skill development initiatives, implemented in collaboration with the Ministry of Skill Development and Entrepreneurship and industry stakeholders, will aim to address the sector's workforce requirements. The government also plans to use the Export Promotion Mission to strengthen branding, market access and the international reach of Indian sports goods.

The Cabinet has also approved a centrally sponsored scheme, namely, the Pradhan Mantri Viksit Gram Swaraj Yojana (PM VGSY), which is approved for implementation from 2026-27 to 2030-31 (co-terminus with the Sixteenth Finance Commission period). The scheme outlay is ₹7,395.55 crore, comprising a central share of ₹4,869.48 crore and a state share of ₹2,526.07 crore.