Prelims: Current events of national and international relations | Economy
Why in News?
The Centre launched a Central Bank Digital Currency (CBDC)-based Direct Benefit Transfer (DBT) of food subsidies
Chandigarh and Dadra & Nagar Haveli became the first UTs to implement the system at scale.
- It is the first large-scale use of CBDC in a Central Government welfare programme.
- Eligible PMGKAY beneficiaries receive subsidies directly in their Digital Rupee wallets instead of conventional bank accounts.
- The subsidy is purpose-bound, meaning it can be used only to purchase food-grains from empanelled merchants.
- Smartphone users – Payments through QR codes.
- Feature-phone users – OTP-based payment mechanism.
- CBDC enables real-time, secure and traceable transactions.
- Key Objectives
- Ensure instant transfer of subsidies.
- Reduce dependence on cash handling.
- Prevent leakage, diversion and misuse.
- Improve transparency and real-time monitoring.
- Ensure subsidies reach beneficiaries without intermediaries.
- Previous Pilots – Experience from Gujarat, Puducherry pilots supported expansion to Chandigarh and Dadra & Nagar Haveli.
- Builds on existing PDS reforms such as –
- Aadhaar-based authentication
- Electronic PoS systems
- Digitised ration cards and beneficiary databases
- One Nation One Ration Card (ONORC)
- Online supply-chain management
- Significance
- Integrates CBDC with welfare delivery and Digital Public Infrastructure.
- Provides a potential scalable model for other States and UTs.
- Context – More than 80 crore beneficiaries receive free foodgrains under PMGKAY.
- The initiative strengthens the JAM (Jan Dhan–Aadhaar–Mobile) ecosystem and aims to make food subsidy delivery more transparent, accountable and beneficiary-centric.
Reference
DDIndia| CBDC-based food subsidy transfer
