NEW DELHI, Aug 14: India on Thursday raised the wages of millions of state workers by over 20 per cent and offered better pay and promotions to the military in a bid to ward off mounting discontent in army ranks.

The average 21 per cent hike to some five million federal workers will cost the government an extra 22 billion rupees ($530 million) in the fiscal year ending March 31, 2009, Finance Minister P. Chidambaram said.In a bid to placate the military, the government promised at least three guaranteed promotions to prevent a trend that has seen dozens of officers seek early retirement to join the lucrative private sector.

The government also doubled a monthly perk for foot soldiers to 2,000 rupees and said officers would receive 6,000 rupees over and above their monthly wages, while the lowest limit of disability pension has been doubled.

India’s million-plus military, the world’s fourth largest, had called for a 200 per cent wage hike for non-ranking personnel.

Observers said the government’s move was a step toward containing discontent in the ranks.

“The (talent) catchment area being the same, the government must offer attractive remunerations like this to attract the cream into the defence services,” former air vice marshal Kapil Kak said.

More than 120 army, navy and air force middle-rung officers have sought early retirement this year, saying they were not being adequately rewarded for their services.

The resignations have come at a bad time for the army, which is already facing a shortage of more than 11,000 trained officers.

A group of ex-generals and retired soldiers are spearheading an unprecedented campaign across India for higher pay for serving personnel and better pensions.—AFP