The Indian government is trialling a CBDC-based subsidy transfer for PMGKAY beneficiaries in Chandigarh and Dadra & Nagar Haveli, aiming to enhance transparency and financial inclusion in welfare programmes.
The Centre is preparing to roll out a digital rupee-linked subsidy transfer for the food security scheme PMGKAY in Chandigarh and Dadra & Nagar Haveli on August 14, in what officials are describing as a test case for a new kind of welfare delivery. According to an official statement, beneficiaries will receive subsidies in CBDC wallets rather than through standard bank transfers, allowing them to pay authorised merchants directly through a traceable digital system.
The move builds on earlier pilots in Gujarat and Puducherry, where the government has already experimented with using central bank digital currency, or CBDC, for public distribution. India’s food and public distribution department said in its annual report that Chandigarh, Puducherry and Dadra & Nagar Haveli have already been part of direct cash transfer arrangements under PMGKAY, and the new rollout shifts that idea further by moving the benefit into programmable digital tokens.
Officials say the aim is to make subsidy delivery more transparent, reduce leakage and cut down on cash handling. The government has also presented the project as a way to strengthen financial inclusion, since beneficiaries would be able to use a wallet-based payment system to buy foodgrains from empanelled or authorised merchants, with transactions recorded in real time.
Union Consumer Affairs Minister Pralhad Joshi, Punjab Governor and Chandigarh Administrator Gulab Chand Kataria, and Union Agriculture Minister Shivraj Singh Chouhan are expected to attend the launch. The initiative is being positioned as a proof of concept that could be expanded to other states and Union Territories if the technology and operating model prove workable at scale.
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