The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday (October 28, 2026) approved a 3% increase in dearness allowance (DA) for central government employees and dearness relief (DR) for pensioners. The increase takes effect from July 1, 2026, and is expected to benefit over 1.17 crore employees and pensioners nationwide.
Information and Broadcasting Minister Ashwini Vaishnaw announced the decision, stating that the hike had been approved ahead of Diwali. The increase will benefit 48.54 lakh central government employees and 68.71 lakh pensioners.
The decision covers both serving employees and pensioners, with the revised DA and DR rates applicable from July 1, 2026.
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Cabinet Approves ₹10,000 Crore Container Manufacturing Scheme
In another key decision, the Union Cabinet approved the Container Manufacturing Promotion Scheme (CMPS) with a budgetary outlay of ₹10,000 crore up to FY40. The scheme aims to promote the development of a globally competitive container manufacturing ecosystem in India.
The approval marks another major decision taken by the Cabinet during the meeting on Wednesday, alongside the increase in DA and DR for central government employees and pensioners.
₹7,395 Crore Allocated to Pradhan Mantri Viksit Gram Swaraj Yojana
The government also allocated ₹7,395 crore to the Pradhan Mantri Viksit Gram Swaraj Yojana. Announcing the allocation, Vaishnaw described the initiative as a paradigm shift from prescription-based schemes to a model focused on capacity building and planning at the local level.
The approach places emphasis on strengthening local-level planning and building the capacity required to support development at the grassroots level.