The government on Tuesday launched its scaled down Cash Transfer Benefit (CBT) in 20 districts, including two in the national capital, with a view to provide cash benefits to needy people.

Defending the scaled down launch of the ambitious scheme, Planning Commission Deputy Chairman Montek Singh Ahluwalia said, "it is good that the scheme is being launched in a phased manner...Let us demonstrate that the technology works".

The states and UTs where the scheme was launched are Karnataka, Andhra Pradesh, Delhi, Rajasthan, Madhya Pradesh and Punjab and UTs of Puducherry, Chandigarh and Daman and Diu.

Rolling out the CBT in two districts in the capital, Delhi Chief Minister Shiela Dikshit said the city government was planning to implement cash transfer through aadhar-linked bank accounts of beneficiaries for a number of its schemes.

"The scheme is aimed at ensuring delivery of full benefit to the beneficiaries," Dikshit said hailing the scheme.

The government had earlier planned to introduce the scheme in 43 districts across 16 states from January 1. The launch has been scaled down due to slow progress of opening of Aadhar-linked bank accounts.The government proposes to extend CBT to entire nation by end 2013, but the scheme would not include LPG, diesel, fertiliser and food for the time being.

At present the CBT will cover seven central schemes mainly dealing with scholarships to SC, ST and OBC students.

The states should be given the option to adopt the CBT, Ahluwalia said, adding Delhi Chief Minister Sheila Dikshit is keen to launch the scheme.

He further said the CBT would check leakages which are "humongous" going up to as high as 40 per cent.

When asked about the slow progress of issuance of Aadhar numbers and opening of bank accounts, Ahluwalia said, "it is not necessary that everybody is covered by Aadhaar but it is necessary that every beneficiary is covered."

He further said 28 crore people have already been enrolled by UIDAI and 24 crore cards have been issued.

Meanwhile, Andhra Pradesh government has said it will launch its own version of Cash Transfer Scheme from April 1, 2013.

"We are contemplating the UID-linked CTS for different welfare schemes we are implementing. Relevant exercise is on to bring the CTS into force and the Chief Minister is positive about it," AP Finance Minister Aanam Ramanarayana Reddy said.

Union Rural Development Minister Jairam Ramesh, while speaking at a function in Ranchi assured that he would ask the Unique Identification Authority of India (UIDAI) to speed up things.

"The direct cash transfer scheme is related to Aadhaar numbers. And in some districts the enrolment process is slow. I will speak to the UIDAI authorities," Ramesh said.