Chandigarh, Jun 18 (IANS): In a move that will benefit over 5.40 lakh serving and retired state government employees, the Punjab government, led by Chief Minister Amarinder Singh, on Friday decided to accept a majority of the recommendations of the Sixth Pay Commission, and decided to implement them from July 1 with retrospective effect from January 1, 2016.

With this decision, taken at the state cabinet meeting, the government said it has fulfilled another major promise to the people, despite the precarious financial health of the state.

The implementation will entail 2.59 times increase in salaries and pensions over the previous Pay Commission recommendations, with an annual increment rate of three per cent, resulting in pay scales of all existing employees continuing to be higher than in neighbouring Haryana.

As a result of the decision, the minimum pay for a government employee would increase from Rs 6,950 per month to Rs 18,000 per month.

The minimum pension will go up from Rs 3,500 to Rs 9,000 per month, and the minimum family pension would also increase to Rs 9,000 per month under the revised structure, an official spokesperson said after a Cabinet meeting that gave the approval for implementation of the Sixth Punjab Pay Commission recommendations.

Under the new structure, a divorced or widowed daughter shall be eligible for family pension, and the eligibility criteria of income for family pension has been enhanced from Rs 3,500 plus dearness allowance (DA) to Rs 9,000 plus DA per month.

The expected amount of net arrears from January 1, 2016 to June 30, 2021 is approximately Rs 13,800 crore.

The Punjab government employees have already been getting five per cent interim enhancement since 2017.

The net arrears amount of employees and pensioners for2016, estimated at Rs 2,572 crore, shall be paid in two equal installments in October 2021 and January 2022.