PUDUCHERRY: Union Minister for Consumer Affairs, Food and Public Distribution Prahlad Joshi will launch a pilot project for Central Bank Digital Currency (CBDC)-based Food Subsidy Distribution under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in the Union Territory of Puducherry on February 26, 2026.
Under the pilot, food subsidies will be credited directly to identified beneficiaries in the form of programmable CBDC tokens. These tokens, issued as part of the Digital Rupee framework, will be deposited into beneficiaries’ CBDC wallets and will be redeemable exclusively for the purchase of entitled foodgrains at authorized merchants and Fair Price Shops (FPS).
The purpose-bound nature of the tokens ensures that the subsidy is utilized strictly for foodgrain procurement, enhancing transparency and accountability in the Public Distribution System (PDS).
The Digital Rupee, or e-rupee, is a tokenised digital version of the Indian rupee issued by the Reserve Bank of India as a Central Bank Digital Currency. Its integration into the Direct Benefit Transfer (DBT) ecosystem is expected to provide a secure, instant, traceable, and programmable digital cash mechanism for PMGKAY beneficiaries.
This reform aims to streamline fund flows, reduce transaction friction, and strengthen the overall efficiency of subsidy delivery.
The pilot is being implemented in coordination with the Government of Puducherry, the Reserve Bank of India, the Public Financial Management System (PFMS), and designated banking partner Canara Bank.
The CBDC-based Digital Food Currency initiative represents the next stage of digital transformation in India’s food security architecture.
Following its rollout in Puducherry, the Government of India plans to expand the pilot in a phased manner to additional beneficiaries and other Union Territories, reinforcing its commitment to technology-driven welfare delivery and beneficiary empowerment.
The initiative marks a significant step in leveraging digital currency to strengthen India’s food security and subsidy delivery framework.
Lieutenant Governor of Puducherry K Kailashnathan, Chief Minister N Rangasamy, and Minister of State for Consumer Affairs, Food and Public Distribution Nimuben Jayantibhai Bambhaniya, along with other dignitaries will be present on the occasion .