The decision was taken at a cabinet meeting presided by Chief Minister Sheila Dikshit.
Currently, around 3.5 lakh beneficiaries are getting the old-age pension.
People in the age bracket of 60 and less than 70 get Rs 1,000 as old-age pension monthly while those who have attained the age of 70 years and above get Rs 1,500.
To be eligible for old-age pension, a senior citizen's annual income should not exceed Rs 60,000.
The Delhi government had started the scheme in 1995 and initially the pension amount was Rs 50 per month.
"We have decided to extend monthly Old Age Pension to an additional 40,000 beneficiaries," said Dikshit.
The Cabinet also decided to recommend to Lt Governor Tejendra Khanna to prorogue the budget session of the Delhi Assembly which was adjourned sine-die on April 2. The session which had commenced on March 13, had a total of 13 sittings.
The Cabinet condemned the brutal Maoist attack in Chhattisgarh and described it as a cowardly act. The cabinet also observed two minutes silence in memory of those who were killed in the attack.
"It was barbarous incident which has shaken our democratic fabric. It must be condemned by all in the strongest possible terms," Dikshit said.
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