NEW DELHI: The Union Cabinet, chaired by Prime Minister Narendra Modi, approved several key policy decisions on Friday focusing on economic growth, infrastructure, and welfare initiatives. The approved measures include hike in dearness allowances, manufacturing incentives, agricultural subsidies, irrigation projects, and road infrastructure.
2% increase in Dearness Allowance for government employees
The Cabinet approved a 2% hike in Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners, effective January 1, 2025. With this revision, DA now stands at 55% of basic pay/pension, benefiting around 48.66 lakh employees and 66.55 lakh pensioners. The move will impose an additional burden of Rs 6,614.04 crore on the exchequer and is in line with the recommendations of the 7th Central Pay Commission.
Read more: Cabinet approves 2% Dearness Allowance hike for central government employees based on 7th Pay Commission recommendation
PLI scheme for passive electronics manufacturing
A Production-Linked Incentive (PLI) scheme worth Rs 22,919 crore has been approved to boost domestic manufacturing of passive electronic components. The scheme is expected to create 91,600 direct jobs and attract Rs 59,350 crore in investment. Over six years, it aims to generate production worth Rs 4.56 lakh crore while integrating Indian companies into Global Value Chains (GVCs). The scheme is aimed to support various industries, including telecom, consumer electronics, automobiles, medical devices, and the power sector.
Rs 37,216 crore subsidy for fertilisers in Kharif 2025
To ensure affordable fertilisers for farmers, the Cabinet approved a Rs 37,216 crore subsidy for phosphatic and potassic (P&K) fertilisers for the upcoming Kharif season (April 1 – September 30, 2025). The government has assured that retail prices for Di-ammonium Phosphate (DAP) will remain unchanged. The allocation is Rs 13,000 crore higher than that for the Rabi season 2024-25.
Approval for Bihar’s Kosi-Mechi Intra-State link project
The government’s Cabinet has approved incorporating the Kosi Mechi Intra-State Link Project of Bihar under PMKSY-AIBP (Pradhan Mantri Krishi Sinchai Yojana-Accelerated Irrigation Benefits Programme). This initiative aims to strengthen irrigation facilities and improve flood control measures in the area. The Rs 6,282.32 crore project, with Rs 3,652.56 crore in central assistance, aims to divert surplus Kosi water for irrigation in Bihar’s Mahananda basin. The project is scheduled for completion by March 2029 and is expected to enhance irrigation and flood management.
Patna-Sasaram Corridor to improve Bihar’s road connectivity
The Cabinet has greenlit a four-lane access-controlled corridor between Patna and Sasaram, Bihar, at a cost of Rs 3,712.40 crore. Developed under the Hybrid Annuity Model (HAM), the 120.10 km project includes both greenfield and brownfield highway development to ease congestion. This corridor will significantly reduce travel time between Patna, Arrah, and Sasaram, benefiting towns like Arrah, Grahini, Piro, Bikramganj, Mokar, and Sasaram.
