The cabinet has approved the salary hikes of over 1 crore central government employees and pensioners on Wednesday.

The report submitted by the 7th Pay Commission Panel recommended a near 15% hike in basic pay of central government employees, including the armed forces, the police force, and more, and the overall hike will be 23.55%, which has been approved after much ado.

"Considering the tight fiscal position this year, the government may improve upon the Pay Commission recommendation for basic pay to 18% or at best 20%," a senior official said.

Also read 7th Pay Commission: New salary hikes of govt employees may get Cabinet nod today

The complete details of the final report approved by the Cabinet will be made public at 6 pm.

This will result in an outlay of over Rs 1.02 lakh crore into the economy, and will impact the monthly salaries of over 47 lakh central government employees and 52 lakh pensioners. Of this, Rs 39,100 crore would be for salaries and Rs 29,300 will be for pensions.

While the 7th Pay Commission hikes will be applicable with a retrospective effect in salaries from January 2016, it is still not clear whether the arrears will be cleared in one go when the hikes are implemented or will be done in installments.

The new salaries are likely to be effected as soon as August 1, earlier reports have suggested.

Also read 7th Pay Commission: Use this New Pay Scale calculator to find out your new salary

The Empowered Group of Secretaries has recommended a wage hike of Rs 21,000 and Rs 2.7 lakh for the lower and upper level, respectively. This is Rs 3,000 more for the lower level and Rs 20,000 more for the upper level prescribed by the 7th CPC.

The financial impact of the 7th Pay Commission hikes will be borne by government -- Rs 73,650 crore -- set aside in the General Budget earlier this year, and Rs 29,300 crore will be borne by the Railways, set aside in the Railway Budget.

You can use this calculator to compute the new salaries.

To read our complete coverage of 7th Pay Commission salary hikes, go here.

The idea behind hike in emoluments is to increase consumer spending to trigger economic growth. But it will have a cascading effect on the private sector, affecting financial viability of various companies. Experts also believe that additional cash was a double-edged whammy, as it could also fuel inflation, affecting the poor. As government employees are known to invest their additional income in real estate, it is believed that the sector currently in doldrums will get a boost.