Government Of India Launches CBDC-Based Digital Food Currency Pilot For Direct Benefit Transfer (DBT) Under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) In Puducherry.

New Delhi, Delhi, 26th of February, 2026 : The Government of India has launched a Central Bank Digital Currency (CBDC)-based Digital Food Currency pilot for Direct Benefit Transfer (DBT) under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in Puducherry. It was inaugurated on 26th February, 2026 at Puducherry by Union Minister for Consumer Affairs, Food and Public Distribution, Shri Pralhad Joshi in the presence of Lieutenant Governor of Puducherry, Shri K. Kailashnathan; Chief Minister of Puducherry, Shri. N. Rangasamy.

Presiding over the occasion, Union Minister for Consumer Affairs, Food and Public Distribution, Shri Pralhad Joshi, said that the introduction of CBDC in the Public Distribution System marks a transformative milestone in India’s food security architecture. He emphasized that integration of Central Bank Digital Currency (CBDC) into PDS will enhance transparency, efficiency and beneficiary empowerment, ensuring that over 80 crore beneficiaries receive their entitlements with greater clarity and accountability. Highlighting the vision of “Every grain, Every rupee, Every entitlements,” he noted that the reform will strengthen awareness about entitlements, enable secure and real-time transactions, and further deepen the Digital India initiative within welfare delivery mechanisms.

Shri Joshi informed that under the CBDC framework, digital coupons generated through the Reserve Bank of India will be credited directly to beneficiaries as programmable digital currency (e₹). Beneficiaries can redeem their entitled quantity of foodgrains at Fair Price Shops (FPS) or merchant outlets using CBDC coupon or voucher codes. The system will address challenges related to biometric authentication and e-POS operational issues while ensuring secure, traceable and real-time transactions. He mentioned that PMGKAY is the largest food security program in the world. It is not only providing Wheat and Rice but also providing millets to the beneficiaries which strengthens the nutritional security.

Shri Joshi informed that the international organizations set on record that 25 crore people have been brought out of multidimensional poverty during the last 11 years.  The recent survey indicated that the share of expenditure on food by Indian households came down by 50% because of free foodgrains being provided by the Central Government and also additional foodgrains being provided by the UT of Puducherry. People are using their savings due to free foodgrain distribution for purchase of other nutritious commodities such as milk, vegetable etc. This not only provides food as well as nutrition security but also lead to healthy and fit younger population and skilled hands for India and rest of the world. He further informed that the pilot project will soon be expanded to 3-4 States and UTs and after deep analysis of outcomes, decision on further rollout of CBDC initiative shall be taken.

Shri Joshi also informed that every month 20 lakh calls are being made to beneficiaries, using artificial intelligence, to gather feedback from beneficiaries about entitled quantity and quality of food grains. Following the spirit of “Sabka Saath,  Sabka Vishwas, Sabka Prayas”, Shri Joshi urged all citizens of the country to put in best of their efforts for well being of the country as envisioned by Hon’ble Prime Minister.

Speaking on this occasion, Hon’ble Lieutenant Governor of Puducherry, Shri K. Kailashnathan, said that today marks a momentous day for the underprivileged and hardworking citizens of Puducherry. It is a day of pride for our families and a day that scripts a new chapter in the food security of our Union Territory.Food is not merely a commodity; it is a fundamental human right. The objective is unequivocal: “No citizen in this country should suffer from hunger.” The Union and State governments are working in tandem to implement various welfare schemes in food security, healthcare, housing, and education. The true success of these schemes lies in their seamless delivery to the end user. Our goal is to eliminate middlemen and corruption, ensuring that benefits reach the rightful beneficiaries while excluding ineligible entries. To ensure that government aid reaches the right person at the right time, the Direct Benefit Transfer (DBT) system, linked to Aadhaar, was implemented and has been functioning effectively in Puducherry. He envisaged that the UT Government look forward to implementation of CBDC in the UT and positive outcomes in terms of citizen empowerment and transparency in PDS distribution.

Speaking on the occasion, Shri N Rangasamy, Hon’ble Chief Minister of Puducherry applauded the new initiative of CBDC bringing in change in delivery of foodgrains and empowering citizens of Puducherry. He informed that the UT of Puducherry, is providing additional foodgrains under PDS to its beneficiaries. The transfer of money by the Government of India and supply of good quality of rice by UT under its scheme is taking care of poor’s imperative need of food security and keeping them away from hunger.  The amount coming in the bank through DBT and now in the wallet thorough CBDC will increase the beneficiary’s motivation; give them self-confidence and empower them to take care of their foodgrain needs with the money available. It is indeed a great step which is providing money through CBDC wallet to beneficiaries directly without any other agencies or persons in between. UT of Puducherry is supporting this pilot and noble intentions of implementation of CBDC. He noted with happiness the transparency, efficiency and ease of entitled money transfer to the beneficiaries from CBDC.

Addressing at the launch event of CBDC in PDS, Secretary, Department of Food & Public Distribution stated that rollout of CBDC in Puducherry for distribution of subsidy under PMGKAY marks a significant step towards ensuring instant, transparent and efficient transfer of benefits directly to beneficiaries. He highlighted that the initiative builds upon the Jan Dhan-Aadhaar-Mobile (JAM) Trinity and further strengthens digital empowerment.  The provisions have specially been made for its wider outreach through special emphasis on inclusion of feature phone users.  The system also enable beneficiaries to locate nearby authorized merchant establishments through the application. He informed that the CBDC-based PDS model will be expanded across Puducherry and subsequently rolled out in Chandigarh and Dadra and Nagar Haveli, with plans for gradual expansion across the country.  He acknowledged and appreciated efforts and support from RBI, Canara Bank and UT of Puducherry in pilot launch of CBDC.

The initiative marks a significant reform in the delivery of food subsidy through the Public Distribution System (PDS) by integrating the Digital Rupee issued by the Reserve Bank of India into the Direct Benefit Transfer (DBT) framework. Under the pilot project, food subsidy will be credited to identified beneficiaries in the form of programmable Central Bank Digital Currency (CBDC) tokens directly into their CBDC wallets. The tokens shall be redeemable exclusively for purchase of entitled foodgrains at authorized merchants & Fair Price Shops (FPS), thereby ensuring purpose-bound usage of subsidy and enhanced transparency.

Over the past several years, the Department of Food and Public Distribution has undertaken extensive digital transformation of India’s food security ecosystem. Key initiatives include end-to-end digitization of ration cards and nationwide portability under the One Nation One Ration Card (ONORC) framework, deployment of e-POS devices for Aadhaar-enabled authentication and real-time transaction capture, and implementation of data-driven validation through the Rightful Targeting Dashboard. Digital supply-chain optimization through Ann Chakra and strengthened grievance redressal mechanisms such as Ann Sahayata have further enhanced transparency, efficiency and citizen-centric service delivery. The CBDC-based Digital Food Currency pilot represents the next stage of this reform journey by integrating a programmable sovereign digital payment layer into the PDS architecture.

The pilot, which began with a limited number of beneficiaries, is expected to mark a transformative step towards integrating technology with welfare delivery, strengthening transparency and building a more efficient and accountable governance framework for last-mile service delivery.

The CBDC-based Digital Food Currency pilot was inaugurated by the Hon’ble Union Minister for Consumer Affairs, Food and Public Distribution, Sh. Pralhad Joshi in the presence of Hon’ble Lieutenant Governor of Puducherry, Shri K. Kailashnathan, Hon’ble Chief Minister of Puducherry, N. Rangasamy, Hon’ble Speaker Government of Puducherry, Shri R. Selvam, Hon’ble Minister for Civil Supplies and Consumer Affairs, Shri. P.R.N. Thirumurugan, Hon’ble Minister for Public Works, Govt. of Puducherry, Shri K. Lakshminarayan, along with senior officials from the Government of India, Government of Puducherry, Reserve Bank of India and the Canara Bank.

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