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MUMBAI: Despite dipping revenues, the Maharashtra Cabinet has approved a 20- 25 per cent wage hike for 13 lakh State government employees on a par with the recommendations of the Sixth Pay Commission.

The State government employees had agitated in the past for parity in wages. Briefing the press after the Cabinet meeting, Chief Minister Ashok Chavan said that it would cost the State exchequer Rs. 8091 crores per year. Apart from this the State would have to fork out Rs. 18,370 crores in arrears as the pay hike will be implemented with retrospective effect from January 1, 2006. About 7.42 lakh pensioners will benefit from the hike.

Dispelling fears that the government which already had a huge deficit would not be able to withstand the fresh demands created by the pay hike, Mr. Chavan said this was a practice since 1986 and there was a commitment that the Centre’s recommendations have to be implemented. He also said that this decision was taken after careful consideration. There will also be a grievances cell to look into problems in wage adjustment and other issues.

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