New Delhi, Feb 26 (IANS) The Government on Thursday launched a new pilot project that uses Central Bank Digital Currency (CBDC) to distribute food subsidies under the Pradhan Mantri Garib Kalyan Anna Yojana in Puducherry.
The initiative aims to make the delivery of food benefits more transparent, efficient and secure by using the digital rupee for Direct Benefit Transfer (DBT).
The pilot was inaugurated on February 26, 2026, in Puducherry by Union Minister for Consumer Affairs, Food and Public Distribution Pralhad Joshi.
The event was attended by Lieutenant Governor K. Kailashnathan and Chief Minister N. Rangasamy, along with senior officials from the central and Union Territory governments.
Under this new system, food subsidy will be credited directly to beneficiaries in the form of programmable digital currency, also known as e₹.
These digital coupons, generated through the Reserve Bank of India, will be sent to beneficiaries’ CBDC wallets.
People can then use the digital coupons to buy their entitled foodgrains from Fair Price Shops or authorised merchant outlets.
The digital currency can only be used for purchasing foodgrains, ensuring that the subsidy is used for its intended purpose.
Speaking at the launch, the Union Minister said that introducing CBDC into the Public Distribution System (PDS) is a major reform in India’s food security system.
He said it will improve transparency, reduce leakages and empower beneficiaries by giving them clear information about their entitlements.
The government highlighted that the PMGKAY is one of the largest food security programmes in the world, providing free foodgrains to over 80 crore beneficiaries.
In addition to wheat and rice, millets are also being distributed to improve nutritional security.
Officials said that free foodgrain distribution has helped reduce household spending on food, allowing families to spend more on other essential and nutritious items.
The Secretary of the Department of Food and Public Distribution said that the new system builds on the Jan Dhan-Aadhaar-Mobile (JAM) framework and strengthens digital empowerment.
Special efforts have been made to include feature phone users so that the system can reach more people.
Beneficiaries will also be able to locate nearby authorised shops through the application.
–IANS
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