In a populist decision ahead of assembly polls next year, Uttar Pradesh cabinet on Tuesday approved the recommendations of the seventh Pay Commission.
The decision will mean 10-15 per cent hike in the salaries of at least 27 lakh government employees and pensioners in the state.
The recommendations will be applicable retrospectively from January 1, 2016.
The cabinet also passed the proposal to build a 300-bed hospital in Bareilly.
The decisions taken on Tuesday are likely to be favourable for the Samajwadi Party government in the state during the next assmbly elections due in 2017.