The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the Home Ministry's proposal to provide enhanced financial aid to 36,384 families, who are mostly living in Jammu region after their displacement from PoK post Independence.
Each of these families will get around Rs 5.5 lakh as aid, a senior official said.
The refugees from West Pakistan, mostly from PoK, settled in different areas of Jammu, Kathua and Rajouri districts.
However, they are not permanent residents of the state in terms of Jammu and Kashmir Constitution.
Some of the families were displaced during Partition in 1947, and others during the 1965 and 1971 wars with Pakistan.
Jammu and Kashmir Sharanarthi Action Committee (JKSAC), an organisation representing the displaced people of the PoK has been maintaining that the package should not be seen as final settlement as Rs 9,200 crore was required to settle all of them.
The Modi government had in January 2015 approved certain concessions for the refugees from West Pakistan settled in Jammu and Kashmir after considering the problems being faced by them.
The concessions include special recruitment drives for induction into paramilitary forces, equal employment opportunities in the state, admission for the children of refugees in Kendriya Vidyalayas, among others.