Govt To Launch CBDC-Based Food Subsidy Pilot Under PMGKAY in Puducherry

The Government of India will launch a CBDC-based Food Subsidy Distribution Pilot under PMGKAY in Puducherry on the 26 February 2026. The pilot will use the Digital Rupee (CBDC) for direct subsidy transfer to beneficiaries. Food subsidy will be credited as programmable CBDC tokens into digital wallets and can be used only at Fair Price Shops. The initiative aims to improve transparency, reduce leakages and strengthen India’s digital public infrastructure through secure and traceable subsidy delivery.

CBDC Based Food Subsidy Pilot Under PMGKAY

The CBDC based Food Subsidy Distribution Pilot is introduced under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).

Key Features,

• Digital Rupee (e-rupee) used for subsidy transfer
• Subsidy credited into CBDC wallets
• Tokens usable only at authorized Fair Price Shops
• Purpose-bound digital subsidy system

This CBDC based Food Subsidy model integrates digital currency into the existing DBT ecosystem.

What Is CBDC and How It Works in PMGKAY

CBDC (Central Bank Digital Currency) is a tokenized digital form of the Indian rupee which is issued by the Reserve Bank of India.

Under the Pilot,

• Food subsidy is converted into programmable digital tokens
• Tokens are credited directly to beneficiary wallets
• Tokens can only be used to buy entitled foodgrains
• Ensures secure, instant, and traceable transactions

The CBDC-based Food Subsidy system prevents misuse and ensures targeted delivery.

Implementation Structure of CBDC-Based Food Subsidy

The pilot in Puducherry is being implemented with coordinated support.

Participating Agencies,

• Government of India
• Government of Puducherry
• Reserve Bank of India (RBI)
• Public Financial Management System (PFMS)
• Canara Bank (banking partner)

Union Minister Pralhad Joshi will inaugurate the CBDC-based Food Subsidy pilot in the presence of Puducherry’s Lt. Governor and Chief Minister.

Benefits of CBDC Based Food Subsidy Distribution

The CBDC-based Food Subsidy pilot is expected to improve the food distribution system.

Major Advantages,

• Higher transparency in subsidy delivery
• Reduced leakages in Public Distribution System
• Real-time traceability
• Purpose-bound usage of funds
• Improved beneficiary empowerment

The Digital Food Currency model enhances accountability in PMGKAY implementation.

Question

Q. The CBDC-based Food Subsidy pilot has been launched under which scheme?

A) PM-KISAN
B) PMGKAY
C) PMJDY
D) PMAY