Mumbai: Describing the direct cash transfer scheme as a game-changer, noted banker and Infosys co-chairman K V Kamath today said the soon-to-be-launched programme will help reduce budgetary deficit by checking the seepages.
"I believe it (direct cash transfer) will change the budgetary process in the country. It will change our deficit process and it will make a huge lot of good as money goes into the hands of people," Kamath said.
He was speaking at an industry conference organised by accounting and consulting major PwC here.
He said according to some estimates, the seepage in the subsidy distribution is as high as 40 per cent, which will potentially get eliminated through the implementation of the scheme, which is going to be launched in 51 districts spanning 16 states starting January 1.
While stating there could be hiccups in the initial days of the implementation, Kamath said there are necessary systems and support to make it a success.
"I think we are capable in the technology context and banks are already prepared in this context through Aadhar scheme and the benefits on the KYC front it brings," he told reporters in reply to a question.
Kamath projected an average annual growth of 7.5-8 per cent for the country in the next five years for the economy, saying it was only investments in infrastructure and troubles with project implementation that had to be dealt with right now.
He also exuded confidence that the proposed National Investment Board (NIB), which is being talked of as a solution to project delays, will be a reality in a few months.
Pointing out the positives, he said the rural areas and the services sector are growing at good rates, while manufacturing has been able to maintain growth in the high single-digit from the earlier double-digit growth rates.
On the concerns about the banking sector, which is facing troubles over asset quality, he said there are no problems and that balance sheets of the banks are in fact much cleaner than what they were in 2002.