Last Updated:
Food subsidy will be credited directly into beneficiaries’ CBDC wallets as programmable digital currency or e₹, instead of being transferred to conventional bank accounts.
The government said digital coupons generated through the Reserve Bank of India will be credited to eligible beneficiaries in the form of programmable CBDC tokens.
The government has launched a Central Bank Digital Currency (CBDC)-based ‘Digital Food Currency’ pilot to distribute food subsidies under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) through the Direct Benefit Transfer (DBT) system in Puducherry, marking a new step in the digital transformation of India’s public distribution system.
The pilot was inaugurated on February 26 in Puducherry by Pralhad Joshi in the presence of K Kailashnathan and N Rangasamy, according to an official statement.
Under the pilot project, food subsidy will be credited directly into beneficiaries’ CBDC wallets as programmable digital currency or e₹, instead of being transferred to conventional bank accounts. The initiative is being implemented in Puducherry, where the Public Distribution System (PDS) already operates through the DBT model.
How The CBDC-Based System Works
The government said digital coupons generated through the Reserve Bank of India will be credited to eligible beneficiaries in the form of programmable CBDC tokens. These tokens can be redeemed exclusively for purchasing entitled foodgrains at Fair Price Shops (FPS) or authorised merchant outlets.
According to the statement, the system will ensure secure, traceable and real-time transactions, while also addressing operational challenges such as biometric authentication issues and e-POS device failures that sometimes affect PDS transactions.
‘Milestone Reform In PDS’
Speaking at the launch, Joshi said the integration of CBDC into the public distribution system marks a “transformative milestone” in India’s food security architecture.
“The integration of CBDC into PDS will enhance transparency, efficiency and beneficiary empowerment, ensuring that over 80 crore beneficiaries receive their entitlements with greater clarity and accountability,” he said.
Joshi described the initiative as aligned with the vision of ‘Every grain, Every rupee, Every entitlement’, adding that programmable digital currency will strengthen awareness about entitlements and deepen the Digital India ecosystem in welfare delivery.
Strengthening Food Security Delivery
The minister noted that PMGKAY is the world’s largest food security programme, under which free foodgrains are provided to eligible households. In addition to wheat and rice, the scheme also supplies millets to strengthen nutritional security.
He said international organisations have noted that around 25 crore people have moved out of multidimensional poverty over the past 11 years, while surveys suggest that household spending on food has declined significantly due to free foodgrain distribution.
According to him, savings generated from the scheme are increasingly being used by households to purchase other nutritious items such as milk and vegetables, improving overall nutrition levels.
Expansion To Other Regions Planned
The government said the CBDC-based food subsidy pilot has begun with a limited number of beneficiaries and will gradually be expanded across Puducherry. The initiative is also expected to be rolled out in Chandigarh and Dadra and Nagar Haveli in the next phase.
Officials said that after analysing the outcomes of the pilot, a decision will be taken on expanding the CBDC-based welfare delivery system to other parts of the country.
Part Of Larger Digital Reforms In PDS
The government said the initiative builds on several digital reforms already implemented in India’s food distribution system, including nationwide portability of ration cards under the One Nation One Ration Card framework, Aadhaar-enabled authentication through e-POS devices, and digital supply-chain monitoring systems.
The CBDC-based digital food currency is expected to further strengthen transparency in subsidy delivery by ensuring that the funds are used only for purchasing entitled foodgrains, thereby making the welfare system more targeted and accountable.
March 11, 2026, 4:22 pm IST
Read More
Source link
[ad_3]
