In News:

The Government of India is rolling out a Central Bank Digital Currency (CBDC)-based Direct Benefit Transfer (DBT) system for food subsidies under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in Chandigarh and Dadra & Nagar Haveli from 14 August 2026.

Key Features

• First UTs: Chandigarh and Dadra & Nagar Haveli will be the first UTs to provide food subsidies to all eligible PMGKAY beneficiaries through programmable Digital Rupee (e?) tokens.
• Direct transfer: Subsidies will be credited to beneficiaries’ CBDC wallets, instead of conventional bank accounts.
• Utilisation: The e? subsidy can be used to purchase foodgrains from empanelled merchants.
• Programmability: Digital tokens can be designed for a specified purpose, enabling targeted utilisation of welfare benefits.
• Earlier pilots: CBDC-based welfare delivery was previously piloted in Puducherry and Gujarat.

Objectives

• Reduce leakages and diversion of subsidies.
• Minimisecash handling.
• Enable real-time, secure and end-to-end traceable transactions.
• Improve monitoring and accountability of subsidy utilisation.
• Promote financial inclusion through simple wallet-based transactions.

Significance

• Demonstrates the potential of Digital Rupee (e?) beyond conventional payments for large-scale welfare delivery.
• Acts as a proof of concept/scalable model for other States and UTs.
• Strengthens Digital Public Infrastructure (DPI) and technology-driven, citizen-centric welfare delivery.