CBDC Pilot for Food Subsidy Distribution:
India has launched a Central Bank Digital Currency (CBDC)-based food subsidy distribution pilot under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in Puducherry, marks a significant reform in the delivery of food subsidy through the Public Distribution System (PDS) by integrating the Digital Rupee (e₹) into the Direct Benefit Transfer (DBT) framework.A defining feature of this initiative is that the Subsidy is credited as programmable CBDC tokens directly into beneficiary wallets.They are redeemable exclusively for the purchase of entitled foodgrains at authorized Fair Price Shops (FPS), ensuring targeted usage and completely eliminating the possibility of fund diversion.This digital cash mechanism is instant, highly secure, and fully traceable, which significantly reduces friction, plugs leakages, and enhances accountability in the national food security ecosystem.The pilot is being implemented in coordination with the Government of Puducherry, Reserve Bank of India, Public Financial Management System (PFMS), and Canara Bank.Following its rollout in Puducherry, the initiative will be expanded in phases to other Union Territories and beneficiaries.
