The news has brought cheers on lakhs of employees and pensioners of Central government.
The Cabinet has given nod to hike of 23.6 percent increase in overall pay - basic pay plus allowances - as recommended by panel for the government employees.
Modi Government needs Rs 1.02 cr to implement Seventh Pay Commission. It will take into effect from January, 2016.
Nearly 48 lakh central government employees and 55 lakh pensioners will be befitted by the pay commission.
A panel headed by Cabinet Secretary PK Sinha was set up by the government in January to process the recommendations of the 7th Pay Commission.