Maharashtra government on Thursday approved the implementation of the 7th Pay Commission recommendations.

Mumbai: In a New Year's gift, the Maharashtra government on Thursday approved the implementation of the 7th Pay Commission recommendations, giving a salary hike to its over 20 lakh employees and pensioners from 1 January.

The approval to the pay hike of government employees from 1 January was given by the cabinet at its meeting in Mumbai and it comes just months ahead of the Lok Sabha elections. The state will face Assembly polls in the second half of 2019.

Finance Minister Sudhir Mungantiwar, addressing reporters at the secretariat, said the decision will benefit 20,50,000 government employees, including those working in Zilla Parishads (ZPs), aided schools and also pensioners.

He said the arrears as per the pay commission will be given to employees with retrospective effect from January 2016, while the dearness allowance will be paid retrospectively for the last 14 months.

Mungantiwar said the decision will put an additional burden of Rs 38,645 crore on the state exchequer.

"The arrears will be paid in equal instalments over five years. Each year the government will spend Rs 7,631 on implementation of the 7th Pay Commission," he added.