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To avoid pitfalls, the government must go about its cash transfer system in a phased manner. Schemes in the first phase must be chosen carefully, in order to demonstrate its success within a short period of time. The government must take care not to dismantle the existing schemes that are working relatively well. For instance, subsidised food distribution is going quite smoothly in states like Kerala, Tamil Nadu, Chhattisgarh etc. There is no need to fix what is not broken.
If executed well, the direct cash transfer programme would not only reduce poverty faster, it would also curb a lot of the wasteful spending that has fattened vested interests at all levels. Needless to say, political communication is the key.
The writer is managing editor, 'The Financial Express' , email@example.com
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