Food Subsidy Goes Digital: Digital Currency-Based DBT to Launch in Chandigarh, DNH

The Centre will launch the Central Bank Digital Currency (CBDC)-based Direct Benefit Transfer (DBT) under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in the Union Territories of Chandigarh and Dadra & Nagar Haveli on August 14, a day ahead of Independence Day, according to an official statement issued on Wednesday. Under the CBDC-based DBT model, eligible PMGKAY beneficiaries will receive their food subsidy directly into their CBDC wallets instead of conventional bank account transfers.

The subsidy can then be used to purchase foodgrains from empanelled merchants through a secure, traceable and real-time digital payment mechanism, the statement said. Union Consumer Affairs, Food, and Public Distribution Minister Pralhad Joshi, Punjab Governor and Chandigarh Administrator Gulab Chand Kataria, and Union Agriculture Minister Shivraj Singh Chouhan will be present at the event along with senior officials. Chandigarh and Dadra & Nagar Haveli are set to become the first Union Territories in the country to operationalise food subsidy transfers to all eligible PMGKAY beneficiaries in the form of programmable Central Bank Digital Currency (CBDC – Digital Rupee) tokens directly into their CBDC wallets.

Building on earlier pilot implementations in Puducherry and Gujarat, the rollout marks complete digital adoption and saturation of all eligible beneficiaries across the targeted Union Territories. The launch of CBDC-based DBT under PMGKAY marks a significant milestone in India’s journey towards building a modern, transparent and technology-driven welfare delivery ecosystem.

The CBDC-enabled DBT model seeks to ensure transparent and end-to-end traceable delivery of public funds, while reducing leakages, diversion and cash handling associated with traditional subsidy delivery mechanisms. It will also facilitate instant and secure transfer of benefits to beneficiaries and promote financial inclusion through simple wallet-based transactions.

The initiative will further strengthen accountability and real-time monitoring of subsidy utilisation and demonstrate the potential of the Digital Rupee for future payment systems, the statement said. The rollout is envisaged as a proof of concept for the nation and a scalable template for adoption by other states and Union Territories.

It is expected to provide valuable operational experience regarding the integration of CBDC with welfare schemes and support the Government’s vision of strengthening Digital Public Infrastructure and delivering citizen-centric services through innovative technologies, the statement added.

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