The increment would be given from August 1 and benefit 23,000 employees putting a burden of Rs 16.56 crore on the exchequer annually.
The decision was taken at a meeting chaired by Chief Minister P K Dhumal.
The Cabinet also approved increase in monthly allowances from Rs 200 to Rs 300 for employees serving in tribal areas from August 1, benefiting 10,735 employees.
It also gave nod for an agreement with the Central government and NABARD for the implementation of a special handloom package.
The Cabinet also decided to allot 30 self-identified Small Hydro Electric Project (SHEPs) with aggregate potential of 57.95 MW for execution. Twenty-four out of these projects were approved for allotment to Himachalis and 7 projects to non-Himachalis.
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