Govt launches CBDC-based Digital Food Currency pilot for DBT in Puducherry

Direct transfer of food subsidy into beneficiaries’ CBDC wallets

The Government of India has launched a Central Bank Digital Currency (CBDC)-based Digital Food Currency pilot for Direct Benefit Transfer (DBT) under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in Puducherry. The inauguration was held in Puducherry by Union Minister for Consumer Affairs, Food and Public Distribution, Shri Pralhad Joshi in the presence of Lieutenant Governor of Puducherry, K Kailashnathan; Chief Minister of Puducherry, N Rangasamy.

Presiding over the occasion, Union Minister for Consumer Affairs, Food and Public Distribution, Joshi, said that the introduction of CBDC in the Public Distribution System marks a transformative milestone in India’s food security architecture. He emphasised that integration of Central Bank Digital Currency (CBDC) into PDS will enhance transparency, efficiency and beneficiary empowerment, ensuring that over 80 crore beneficiaries receive their entitlements with greater clarity and accountability. Highlighting the vision of “Every grain, Every rupee, Every entitlements,” he noted that the reform will strengthen awareness about entitlements, enable secure and real-time transactions, and further deepen the Digital India initiative within welfare delivery mechanisms.

Joshi informed that under the CBDC framework, digital coupons generated through the Reserve Bank of India will be credited directly to beneficiaries as programmable digital currency (e₹). Beneficiaries can redeem their entitled quantity of foodgrains at Fair Price Shops (FPS) or merchant outlets using CBDC coupon or voucher codes. The system will address challenges related to biometric authentication and e-POS operational issues while ensuring secure, traceable and real-time transactions. He mentioned that PMGKAY is the largest food security program in the world. It is not only providing Wheat and Rice but also providing millets to the beneficiaries which strengthens the nutritional security.

Joshi informed that the international organisations set on record that 25 crore people have been brought out of multidimensional poverty during the last 11 years. The recent survey indicated that the share of expenditure on food by Indian households came down by 50 per cent because of free foodgrains being provided by the Central Government and also additional foodgrains being provided by the UT of Puducherry. People are using their savings due to free foodgrain distribution for purchase of other nutritious commodities such as milk, vegetable etc. This not only provides food as well as nutrition security but also lead to healthy and fit younger population and skilled hands for India and rest of the world. He further informed that the pilot project will soon be expanded to three to four states and UTs and after deep analysis of outcomes, decision on further rollout of CBDC initiative shall be taken.

Joshi also informed that every month 20 lakh calls are being made to beneficiaries, using artificial intelligence, to gather feedback from beneficiaries about entitled quantity and quality of food grains. Following the spirit of “Sabka Saath, Sabka Vishwas, Sabka Prayas”, Shri Joshi urged all citizens of the country to put in best of their efforts for well being of the country as envisioned by Hon’ble Prime Minister.

Kailashnathan said that today marks a momentous day for the underprivileged and hardworking citizens of Puducherry. It is a day of pride for our families and a day that scripts a new chapter in the food security of our Union Territory.Food is not merely a commodity; it is a fundamental human right. The objective is unequivocal: “No citizen in this country should suffer from hunger.” The Union and State governments are working in tandem to implement various welfare schemes in food security, healthcare, housing, and education. The true success of these schemes lies in their seamless delivery to the end user. Our goal is to eliminate middlemen and corruption, ensuring that benefits reach the rightful beneficiaries while excluding ineligible entries. To ensure that government aid reaches the right person at the right time, the Direct Benefit Transfer (DBT) system, linked to Aadhaar, was implemented and has been functioning effectively in Puducherry. He envisaged that the UT Government look forward to implementation of CBDC in the UT and positive outcomes in terms of citizen empowerment and transparency in PDS distribution.