Describing the government's ambitious direct cash transfer scheme as a “powerful tool”, Reserve Bank Deputy Governor K C Chakrabarty has said that the initiative will help reduce fiscal deficit, which in turn will also bring down inflation if implemented well.

Mr. Chakrabarty, the senior-most of the four deputy governors at the Mint Road, told PTI in an interview. The former commercial banker, who recently got a second term for another two years, explained that the scheme will have a positive impact on the inflation front. The efficiency in expenditure will help reduce the fiscal deficit, he added.

Mr. Chakrabarty said the programme, which is planned to be introduced in 43 districts starting January 1, will help in curtailing the massive leakages and wastages in the subsidy distribution system.