CBDC-based DBT launched for PMGKAY beneficiaries in Chandigarh, Dadra & Nagar Haveli

New Delhi/Chandigarh: The Government on Friday launched the 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.

Under the Central Bank Digital Currency (CBDC)-based DBT model, eligible PMGKAY beneficiaries will receive food subsidies directly into their CBDC wallets rather than via 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.

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Chandigarh and Dadra & Nagar Haveli become the first Union Territories in the country to operationalise food subsidy transfers to eligible PMGKAY beneficiaries as programmable Central Bank Digital Currency (CBDC–Digital Rupee) tokens, directly into their CBDC wallets.

Union Minister for Agriculture and Farmers Welfare Shivraj Singh Chouhan launched the initiative for PMGKAY beneficiaries at an event here. Dignitaries present at the event also included Punjab Governor and Chandigarh Administrator Gulab Chand Kataria, Union Minister for Consumer Affairs, Food and Public Distribution Pralhad Joshi and Union Minister of State for Consumer Affairs, Food and Public Distribution Nimuben Jayantibhai Bambhaniya, among others.

Launching the CBDC-based DBT system, Chouhan said the initiative marks an important step towards bringing greater transparency, security and timeliness to the Public Distribution System (PDS).

He said that under the leadership and guidance of Prime Minister Narendra Modi, there will be no compromise on the interests of farmers and the poor. ​ Chouhan added that the CBDC-based DBT system will enable payments for ration and foodgrains to reach beneficiaries directly, securely and transparently.

The pilot launched in Chandigarh is intended to serve as a model for adoption across the country, according to the Union Minister.

Under the new system, technological safeguards have been incorporated to ensure that beneficiaries can use the funds only for purchasing foodgrains and other essential food items, preventing the money from being diverted for other purposes.

At the same time, beneficiaries will have greater choice. In addition to wheat and rice, they will be able to opt for pulses or other essential food commodities.

Chouhan made it clear that there would be no compromise on farmers' interests in matters relating to agricultural policy and food security.

He said that under the Prime Minister's leadership, the transparent delivery of PM-KISAN Samman Nidhi and other benefits will continue, with the protection and welfare of farmers remaining the government's highest priority.

Chouhan praised the Pradhan Mantri Garib Kalyan Anna Yojana, saying that providing free foodgrains to more than 800 million people represents one of the country's major social security measures.

Speaking on the occasion, Pralhad Joshi said digitalisation is helping deliver benefits to the eligible beneficiaries in a transparent manner while also helping detect the ineligible ones.

He said when Prime Minister Narendra Modi talked about digital transactions several years ago, many in the opposition criticised and raised several questions.

But today, if any country does the most digital transactions, that is India, Joshi said.

Under the CBDC-based DBT, Joshi assured that there is no question of excluding any eligible beneficiary. If I can say, this system is "rightful targeting", while wrongful beneficiaries will be automatically deleted, he said.

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Chandigarh was among the pioneers in implementing the DBT model for food subsidy in September 2015, moving from physical distribution of subsidised foodgrains to direct transfer of subsidy into the Aadhaar-linked bank accounts of entitled households, officials said.

The CBDC initiative builds on this existing DBT framework and seeks to make welfare delivery more transparent, traceable, efficient and purpose-bound, they said.

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 initiative will further strengthen accountability and real-time monitoring of subsidy utilisation and demonstrate the potential of the Digital Rupee for future payment systems.

An official statement issued here on Friday said the digital rupee, or e-rupee, is a tokenised digital version of the Indian rupee, issued by the Reserve Bank of India (RBI) as a Central Bank Digital Currency (CBDC).

The introduction of CBDC – Digital Rupee offers an opportunity to enhance the DBT ecosystem by providing a secure, instant, traceable, and programmable digital cash mechanism for PMGKAY beneficiaries.

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