Health Minister Ashok Bhatt said the decision would be implemented with retrospective effect from January 1, 1996, entailing a burden of Rs 6.51 crore on the exchequer by way of arrears.

Bhatt said there would be a ceiling of Rs 26,000 on the total of salary and non-practicing allowance.

Dr Bipin Patel, national vice-president of the Indian Medical Association and co-ordinator of the state In-service Doctors Federation, welcomed the government decision, but said the state should give to the doctors all those benefits extended by the centre.

These included conveyance allowance, telephone allowance, academic allowance and transport allowance, Patel said.

The doctors had threatened to launch a state-wide strike to press their demands from April 16, but had deferred it on the minister's assurance of an early decision to solve the doctors' problem.