The Union Cabinet gave its approval to de-link release of assistance to state governments from the retirement age, as this condition was coming in the way from release of arrears to the states.
The state governments had been opposing linking the retirement age issue with release of arrears arguing that it will put additional burden on them. A committee of secretaries had also supported the demand of state governments.
According to sources, the arrears to the tune of Rs 8000 crore are likely to be paid in three to four installments benefiting close to four lakh teachers.
The UGC-initiated Sixth Pay commission package for teachers, based on which the scales of centrally funded institutes were revised, has a provision that requires raising the retirement age to 65.
The arrears were due as the Centre (which will bear 80 per cent of the increased arrears) had asked the states in 2008 to follow the pay scales that centrally funded institutes introduced in 2008 with retrospective effect from January 1, 2006.
