Atal Adarsh Gram Puruskar yojana aims at encouraging community participation in implementing developmental activities and making gram panchayats accountable to people, officials said.
Under the scheme, a cash award of Rs 20 lakh would be given to the best panchayat at state level, Rs 10 lakh at district level, Rs five lakh at sub-division and Rs two lakh at block level on August 15 every year.
The cabinet also enhanced medical allowance of the state government employees and pensioners from Rs 100 to Rs 250 per month with effect from April 1, 2012.
It also decided to put a ceiling of annual family income of Rs one lakh for providing employment on compassionate grounds to the kins of deceased employees.