India advances its digital currency infrastructure with a new pilot programme in Chandigarh and Dadra and Nagar Haveli, integrating Central Bank Digital Currency into food subsidy payments to enhance transparency and reduce leakage.
India will take a further step in testing its digital currency infrastructure on August 14, when the Centre begins a Central Bank Digital Currency-based direct benefit transfer system for food subsidies in Chandigarh and Dadra and Nagar Haveli. The two Union Territories are set to become the first parts of the country to deliver food subsidy payments entirely through Digital Rupee tokens under the Pradhan Mantri Garib Kalyan Anna Yojana, according to the Ministry of Consumer Affairs, Food and Public Distribution.
The launch will be attended by Pralhad Joshi, the Union minister for consumer affairs, food and public distribution, along with Gulab Chand Kataria, Shivraj Singh Chouhan and Nimuben Jayantibhai Bambhaniya, the ministry said. Under the new arrangement, eligible beneficiaries will receive subsidy amounts in CBDC wallets rather than through standard bank transfers.
Those digital tokens can then be spent at empanelled fair price shops, with the transactions recorded in real time. The ministry says the model is designed to improve traceability, curb leakage and reduce diversion in the food distribution chain, while also cutting the handling of cash and speeding up payments to beneficiaries.
The move builds on earlier pilots in Puducherry and Gujarat, where the government tested CBDC-linked subsidy delivery before extending the model to these two Union Territories. Officials are positioning the rollout as a trial for wider use across India, with the aim of assessing how central bank digital currency can be integrated into large welfare schemes and the broader push towards Digital Public Infrastructure.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
