The decision was taken at a Cabinet meeting chaired by Chief Minister Arvind Kejriwal at his residence.
"Cabinet has approved a hike in salary and allowances of MLAs. The government will now send the approved proposal to the Lt Governor for his nod," sources said.
They, however, did not specify the quantum of hike in allowances and salary. Delhi has 70 MLAs.
In July, a group of AAP legislators had demanded a significant hike in salary, arguing that their earnings were not enough to run their family and offices.
The committee, which had submitted its report to Assembly Speaker Ram Niwas Goel, had favoured a 400 per cent hike in basic salary of MLAs from Rs 12,000 to Rs 50,000 per month.
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