With eyes on polls next year, Modi government announced an early Diwali bonanza of Rs2,250 crore for eight lakh government employees and pensioners on Thursday.

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The long pending announcement of disbursing the arrears arising from the implementation of the sixth pay commission recommendations was coincided with Narendra Modi completing a decade as Gujarat chief minister. The government also announced hike in salaries of fixed salary employees.

The government would pay Rs1,082 crore in cash as arrears to employees and Rs295 crore to pensioners. It also announced that 7% DA declared by the Centre to state government employees and pensioners would be paid with effect from July 2011.