New Delhi, India: The Government of India will introduce Central Bank Digital Currency (CBDC)-based Direct Benefit Transfer (DBT) for food subsidies under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in Chandigarh and Dadra & Nagar Haveli on August 14.

The two Union Territories will become the first in the country to operationalise food subsidy transfers for eligible PMGKAY beneficiaries through programmable Digital Rupee tokens deposited directly into CBDC wallets.

The launch will be attended by Union Minister for Consumer Affairs, Food and Public Distribution Piyush Goyal, Punjab Governor and Chandigarh Administrator Gulab Chand Kataria, Union Agriculture and Farmers Welfare Minister Shivraj Singh Chouhan, and Minister of State for Consumer Affairs, Food and Public Distribution Nimuben Jayantibhai Bambhaniya.

Under the new system, beneficiaries will receive their food subsidy through CBDC wallets rather than conventional bank account transfers. The digital funds can be used to purchase foodgrains from authorised merchants through a real-time digital payment mechanism.

The government said the model is intended to improve traceability and monitoring of public funds while reducing the risks of leakage, diversion and cash-handling associated with traditional subsidy delivery systems. It is also expected to provide beneficiaries with faster access to welfare payments and support greater financial inclusion through wallet-based transactions.

The rollout builds on earlier pilot implementations in Puducherry and Gujarat. With the new launch, the government plans to extend the digital system to all eligible beneficiaries across the two Union Territories.

The initiative will also serve as a proof of concept for integrating CBDC technology with welfare programmes. The experience is expected to provide operational insights that could support wider adoption of similar systems by other states and Union Territories.

The government said the programme is aligned with efforts to strengthen digital public infrastructure and explore new applications for the Digital Rupee in future payment systems.

Source: This article is based on an official press release issued by the Press Information Bureau, Ministry of Company Affairs, Government of India
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