The Centre will launch CBDC-based DBT under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in Chandigarh and Dadra & Nagar Haveli on August 14. The initiative will allow eligible beneficiaries to receive food subsidies directly through CBDC wallets. The move aims to make welfare payments more transparent, traceable and efficient.
CBDC-Based DBT to Enable Direct Food Subsidy Transfers
Under the new system, beneficiaries will receive programmable Digital Rupee tokens in their CBDC wallets. They can use these tokens to purchase foodgrains from empanelled merchants.
The model will enable secure and real-time transactions. It will also reduce reliance on conventional bank account transfers for the targeted food subsidy payments.
Chandigarh and Dadra & Nagar Haveli will become the first Union Territories to operationalise food subsidy transfers through CBDC wallets for all eligible PMGKAY beneficiaries.
The rollout follows earlier pilot initiatives in Puducherry and Gujarat. It marks a further step towards expanding the use of the Digital Rupee in government welfare delivery.
CBDC-Based DBT Targets Greater Transparency
The CBDC-enabled system is designed to improve transparency and accountability in subsidy distribution. It will allow authorities to track subsidy utilisation in real time.
The programmable nature of Digital Rupee tokens will also help ensure that the subsidy is used for its intended purpose. The government expects the model to reduce leakages, diversion and cash handling in welfare payments.
The initiative could also provide a framework for wider adoption. Its implementation in the two Union Territories will help demonstrate how CBDC infrastructure can support large-scale welfare delivery.
Digital Rupee Gains Role in Welfare Delivery
The rollout adds a new use case for India’s Central Bank Digital Currency. Beyond digital payments, the system could support targeted and programmable government transfers.
For businesses, empanelled merchants will play an important role in the new model. They will enable beneficiaries to use Digital Rupee tokens for eligible foodgrain purchases.
The government is positioning the initiative as a scalable model for future welfare programmes. Its performance in Chandigarh and Dadra & Nagar Haveli will provide insights into the operational and technology requirements for broader adoption.
The CBDC-based DBT rollout under PMGKAY marks another step in India’s digital transformation of welfare delivery. The focus will remain on secure payments, better tracking and more efficient subsidy utilisation.
