With assembly polls round the corner, the Oommen Chandy government in Kerala on Wednesday hiked salary and pension for all state government employees with immediate effect.
The current increase will cost the government Rs.7,222 crore annually.
At present, there are around half a million each of state government employees, teachers and retired employees.
The last salary hike announcement was made on February 26, 2011, when the V.S. Achuthanandan-led Left Front government was in office. The hike was implemented with effect from 2009.
Addressing reporters here on Wednesday, Chandy said the government decided to accept the recommendation of the 10th Pay Commission with very marginal changes and it will be paid with effect from July 2014.
"With this, the salary of government employees and teachers would go up by a minimum of Rs.2,000 and a maximum of Rs.12,000. The new changes would become effective when they receive salary/pension in March," said Chandy.
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"We also have decided to accept the recommendation of providing a new medical insurance scheme for all pensioners," Chandy said.
He said the arrears of the hike would be made available to all starting April 1, 2017, and it would be paid in four half-yearly installments.
"In the previous hike, the arrears were merged with the provident fund and hence it was locked for five years, whereas this time, they will get it in two and a half years," he said.
Chandy said the daily wage for those working in government establishments also has been hiked.
State Finance Secretary K.M. Abraham said that with this hike, the salary, pension and interest would account for 80 percent of the state's annual revenue, up from around 70 percent.
Chandy, meanwhile, feigned ignorance when asked if this was a sop with the elections round the corner. "Salary hike and elections have nothing in common," he said.