Hi Anuja,
While creating data grid you might have used list of objects (from a specific entity) to display.
Action-1: When the user clicks on the button, you should create a new object for the same entity and do the UI refresh will show the newly added object / new row similar to the below. I am not sure what the below drop down refers, it could be the enumeration / references.
Action-2: When the user clicks on save, the same object (created from Action-1) can be updated with the selected value and committed.
Action-3: If the user clicks on the Delete button, you can delete the newly created object(from Action-1).