The Central Bank will introduce a pilot project in Puducherry under the PMGKAY to distribute food subsidies using a Central Bank Digital Currency (CBDC). This move aims to enhance India’s digital infrastructure and bring more transparency to subsidy distribution. The digital rupee, a tokenized version of the Indian rupee, will be issued by the RBI for this purpose.
Union Minister Pralhad Joshi will inaugurate the pilot project in the presence of Puducherry Lt Governor K. Kailashnathan and Chief Minister N. Rangasamy. This initiative integrates the digital rupee into the direct benefit transfer system to streamline the delivery of food subsidies. Beneficiaries will receive programmable CBDC tokens for purchasing entitled food grains at authorized outlets.
The project will start in Puducherry and gradually expand to cover more beneficiaries and Union Territories. This digital food currency initiative, in collaboration with various stakeholders including the RBI and Canara Bank, aims to improve transparency, efficiency, and accountability in food subsidy distribution.
