Cabinet Clears 3% DA Hike for 1.17 Crore Staff and Pensioners, Plus a Rs 10,000 Crore Container Plan

Four decisions in one sitting

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved four decisions on 28 October 2026, according to the government's briefing to reporters. Together they span pay for central government staff, a long-term industrial bet on shipping containers, a manufacturing push for sports goods, and a rural governance programme. The combined outlay announced for the three schemes was more than Rs 19,000 crore, with the pay revision carrying a separate annual cost of about Rs 10,016 crore.

The headline for households is the pay decision. Dearness allowance for serving central government employees and dearness relief for pensioners will rise by 3 percentage points, from 60 per cent to 63 per cent of basic pay and pension respectively. The increase applies from 1 July 2026, so beneficiaries should receive arrears for the months since then. It covers 48.54 lakh employees and 68.71 lakh pensioners, more than 1.17 crore people in total.

Why the container scheme matters

The largest single scheme is the Container Manufacturing Promotion Scheme, worth Rs 10,000 crore and running until 2039-40. India imports the large majority of its shipping containers, and the government argues that dependence is a structural weakness for a trading economy: when containers are scarce or expensive, exporters pay more and supply chains wobble. China controls roughly 95 per cent of the global container market, according to data cited in the official release.

The scheme is split into three parts. Interest subvention of Rs 859 crore will give eligible manufacturers 3 per cent a year off qualifying term loans for new factories and expansions. Operational assistance of Rs 8,891 crore will support containers that are made to global shipping standards and sold by approved manufacturers, bridging the cost gap with imports. A further Rs 150 crore will fund common testing and certification facilities, including dynamic longitudinal impact testing. New plants must reach at least 1,00,000 twenty-foot equivalent units (TEUs) a year, while expansions must reach at least 25,000 TEUs, and projects must be commissioned within three years of in-principle approval. The stated aim is to lift domestic capacity tenfold, to 7.5 lakh TEUs by 2039-40.

Sports goods and rural governance

The Khelo India Sports Goods Manufacturing Scheme carries an outlay of Rs 1,857 crore. Its goal is to shift India from importing most of its sports equipment to making more of it at home, building an industry behind the athletes the wider Khelo India programme, launched in 2017, was designed to nurture. The government points to exports, jobs and lower import dependence as the measures of success.

The fourth decision, the Pradhan Mantri Viksit Gram Swaraj Yojana, is allocated Rs 7,395.55 crore for rural governance. Details of its rollout were presented as part of the same Cabinet package, with the emphasis on strengthening grassroots administration rather than a single flagship construction target.

What to watch

For employees and pensioners, the practical next step is the formal order giving effect to the revised rates and the payment of arrears from July. For industry, the test will be whether the container scheme's interest support and per-unit assistance are enough to close the price gap with established overseas makers, and whether greenfield plants actually reach the minimum-capacity thresholds within three years. The government has framed the package as a Diwali-season set of decisions; its lasting value will be judged by factory output and household pay slips, not by announcement-day totals.