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India Launches Digital Rupee Food Subsidy Pilot in Puducherry for PMGKAY

The Government has launched a pilot project using Central Bank Digital Currency 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 crediting programmable digital currency directly to beneficiaries' CBDC wallets. Union Minister Pralhad Joshi inaugurated the pilot, stating it represents a major reform for India's food security system by reducing leakages and empowering beneficiaries. The system builds on the JAM trinity and includes efforts to reach feature phone users, with beneficiaries able to use the digital coupons solely for purchasing foodgrains at authorized shops.

Key Points: CBDC Pilot for Food Subsidies Launched in Puducherry

  • Uses digital rupee for food subsidy DBT
  • Aims for transparency & reduced leakages
  • Credits programmable CBDC to beneficiary wallets
  • Builds on Jan Dhan-Aadhaar-Mobile framework
  • Includes feature phone users for wider reach
2 min read

Govt launches CBDC-based digital food currency pilot in Puducherry

Govt launches digital rupee pilot for PMGKAY food subsidies in Puducherry, aiming for transparent & efficient Direct Benefit Transfer via CBDC wallets.

"introducing CBDC into the Public Distribution System is a major reform in India's food security system - Union Minister Pralhad Joshi"

New Delhi, Feb 26

The Government on Thursday launched a new pilot project that uses Central Bank Digital Currency 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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Reader Comments

P
Priya S
Hope they have considered our elderly population and people in rural areas. Not everyone is comfortable with digital wallets. The feature phone support is a good move though.
V
Vikram M
Transparency is key. If this stops ration shop malpractices and black marketing of grains, it will be a huge win for the common man. Let's see how it works on the ground.
A
Ananya R
Including millets is a smart move for nutrition! But the government must ensure internet connectivity and digital literacy training go hand-in-hand with such tech pilots.
S
Siddharth J
While the intent is good, I'm concerned about data privacy and what happens during server downtimes or technical glitches. People can't miss their monthly ration because of an app crash.
K
Karthik V
Building on JAM trinity is the right way forward. This could be a global model for efficient welfare distribution. Proud to see India leading in fintech for social good! 👏

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