The Government initiated a pilot project in Puducherry utilizing Central Bank Digital Currency (CBDC) to dispense food subsidies through the Pradhan Mantri Garib Kalyan Anna Yojana. This move is aimed at enhancing the transparency, efficiency, and security of food benefits distribution by employing digital rupee for Direct Benefit Transfer (DBT).
On February 26, 2026, the pilot project was inaugurated in Puducherry by Union Minister Pralhad Joshi, overseeing Consumer Affairs, Food, and Public Distribution. The event witnessed the presence of Lieutenant Governor K. Kailashnathan, Chief Minister N. Rangasamy, and senior officials from both central and Union Territory governments.
Under this innovative system, food subsidies will be directly credited to beneficiaries in the form of programmable digital currency, known as e₹, generated through the Reserve Bank of India. These digital coupons will be transmitted to beneficiaries’ CBDC wallets for their convenience.
The digital currency can solely be utilized for purchasing foodgrains, ensuring that the subsidy serves its intended purpose effectively. This initiative is a significant step towards reforming India’s food security system by integrating CBDC into the Public Distribution System (PDS), as stated by the Union Minister during the launch.
The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) is highlighted as one of the world’s largest food security programs, benefitting over 80 crore recipients with free foodgrains. The distribution now includes millets alongside wheat and rice to enhance nutritional security, reducing household expenditure on food and enabling families to allocate resources to other essential items.
The new system, building upon the Jan Dhan-Aadhaar-Mobile (JAM) framework, emphasizes digital empowerment and aims to reach a wider audience, including feature phone users. Beneficiaries will also have access to a feature enabling them to locate nearby authorized shops for their convenience.
