A Cabinet meeting, chaired by Prime Minister Manmohan Singh, approved earmarking Rs 80 crore annually for the next three years to create 10 per cent new posts of judges and additional district judges in states.
The funds would be released to the Department of Justice in the Law Ministry.
The amount could also be utilised to improve the existing court infrastructure in states.
The 21 High Courts oversee the utilisation of the funds.
The Cabinet approval is part of the decision taken by the joint conference of Chief Ministers and Chief Justices of High Courts held here in August, 2009 which recommended steps required for bringing down the backlog of cases and ensuring speedy trial.
It had also recommended filling up of vacancies in High Courts and subordinate courts.