The Union Cabinet has approved a series of major measures covering maritime insurance, Central Government employees, rural roads and railway infrastructure.
Among the key decisions is the creation of the Bharat Maritime Insurance Pool, a domestic insurance mechanism backed by a sovereign guarantee of ₹12,980 crore. The Cabinet has also approved a 2% increase in Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners.
In addition, the government has extended Pradhan Mantri Gram Sadak Yojana-III (PMGSY-III) until March 2028 and cleared two railway multi-tracking projects worth a combined ₹24,815 crore.
Bharat Maritime Insurance Pool Gets Cabinet Approval
The Cabinet has approved the establishment of the Bharat Maritime Insurance Pool, aimed at ensuring uninterrupted access to maritime insurance for Indian trade.
Briefing the media in New Delhi following the Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw said the proposed pool will help Indian trade secure affordable insurance coverage even when ships operate through high-risk or volatile international maritime routes.
The facility will cover vessels transporting cargo between international destinations and Indian ports in both directions, helping maintain insurance availability during periods of heightened geopolitical or maritime risk.
Pool to Cover Major Maritime Risks
The Bharat Maritime Insurance Pool is expected to provide coverage across several key areas of marine insurance, including:
- Hull and Machinery insurance
- Cargo insurance
- Protection and Indemnity (P&I)
- War risk insurance
The initiative is also intended to strengthen India’s domestic capabilities in maritime risk management.
According to Vaishnaw, the pool will allow liability insurance to be managed within India while enabling insurance solutions to be developed according to Indian shipping conditions and regulatory requirements.
It is also expected to encourage the development of specialised expertise in marine underwriting, claims handling and maritime legal services within the country.
A dedicated Governing Body will oversee the establishment and functioning of the insurance pool.
Why Has the Government Approved a Sovereign Guarantee?
The government believes the sovereign guarantee will play an important role in strengthening India’s resilience in the maritime insurance sector.
The move is aimed at supporting self-reliance, reducing vulnerability to international sanctions and increasing sovereign control over critical maritime insurance requirements.
The domestic pool is therefore expected to provide an additional layer of security for Indian trade when conventional international insurance markets face disruptions or restrictions.
Central Government Employees to Get 2% DA Hike
The Union Cabinet has also approved an additional instalment of Dearness Allowance for Central Government employees and Dearness Relief for pensioners, effective from January 1, 2026.
The latest decision represents a 2 percentage-point increase over the existing DA and DR rate of 58% of basic pay or pension.
With the revision, the move is aimed at providing relief to employees and pensioners against the impact of rising prices.
According to Ashwini Vaishnaw, the combined annual financial impact of the increase in DA and DR on the government exchequer will be more than ₹6,791 crore.
The decision is expected to benefit over 50 lakh Central Government employees and more than 68 lakh pensioners.
PMGSY-III Extended Until March 2028
Another important Cabinet decision relates to rural road connectivity.
The government has approved the continuation of Pradhan Mantri Gram Sadak Yojana-III (PMGSY-III) beyond its earlier deadline of March 2025, extending the programme until March 2028.
The scheme focuses on upgrading and consolidating important rural road networks, including through routes and major rural links connecting villages with key facilities and economic centres.
These include:
- Gramin Agricultural Markets (GrAMs)
- Higher secondary schools
- Hospitals
The revised financial outlay for PMGSY-III has been set at ₹83,977 crore.
More Time for Rural Roads and Bridges
The Cabinet has also approved an extension of deadlines for completing various PMGSY-III infrastructure projects.
The timeline for completing roads and bridges in plain areas and roads in hilly regions has been extended until March 2028.
For bridges located in hilly areas, the completion deadline has been extended until March 2029.
The government said the extended timeline will provide additional time to complete the targeted road upgrades and help PMGSY-III deliver its intended socio-economic benefits to rural communities.
₹24,815 Crore Approved for Two Railway Projects
The Cabinet Committee on Economic Affairs (CCEA) has approved two major railway multi-tracking projects with a combined estimated cost of ₹24,815 crore.
The approved projects are:
- Ghaziabad–Sitapur 3rd and 4th Line
- Rajahmundry (Nidadavolu)–Visakhapatnam (Duvvada) 3rd and 4th Line
Together, the projects will cover 15 districts across Uttar Pradesh and Andhra Pradesh.
Railway Expansion to Ease Congestion
The addition of new railway lines is expected to increase network capacity and improve the movement of passengers and freight.
Vaishnaw said the projects are expected to strengthen operational efficiency and service reliability across the Indian Railways network.
The multi-tracking works are also aimed at reducing congestion and allowing trains to operate more efficiently on busy railway routes.
Key Cabinet Decisions at a Glance
The latest Cabinet decisions cover several areas that directly impact India’s economy and infrastructure.
Bharat Maritime Insurance Pool: ₹12,980 crore sovereign guarantee to support domestic maritime insurance coverage.
DA and DR: 2% increase effective January 1, 2026, benefiting more than 50 lakh employees and 68 lakh pensioners.
PMGSY-III: Scheme extended until March 2028 with a revised outlay of ₹83,977 crore.
Railway projects: Two multi-tracking projects approved at a combined cost of ₹24,815 crore across Uttar Pradesh and Andhra Pradesh.
Together, these decisions focus on strengthening India’s maritime resilience, employee welfare, rural connectivity and railway infrastructure, while supporting the government’s broader objectives of economic capacity building and self-reliance.