Chandigarh and Dadra & Nagar Haveli have become the first UTs to operationalize food subsidy transfers to all eligible PMGKAY beneficiaries in form of programmable Central Bank Digital Currency (CBDC)-based DBT.
- The initiative builds on earlier pilots conducted in Gujarat and Puducherry.
- It is the first large-scale application of CBDC in Central Government welfare programmes.
- CBDC (Digital Rupee (e₹)) is a sovereign digital currency issued by Reserve Bank of India.
About CBDC-based DBT
- Direct Wallet Transfers: Food subsidy will be transferred directly into beneficiary’s Digital Rupee wallet, instead of a conventional bank account.
- Accessible Payments: Transactions occur via QR codes on smartphones or OTPs on feature phones.
Significance of CBDC based DBT for food subsidies
- Promotes financial inclusion through simple wallet-based transactions.
- Remove middlemen from government-run beneficiary schemes meant for poor people and helps actualize the government's "Har Dana, Har Rupya, Har Adhikar" vision.
- Ensure transparent and end-to-end traceable delivery of public funds, while reducing leakages, diversion and cash handling associated with traditional subsidy delivery mechanisms.
- End-to-End Traceability: Technology creates an unchangeable digital ledger, ensuring transparent tracking without excluding legitimate beneficiaries.
- Digital Public Infrastructure (DPI): Demonstrates potential integration of CBDC with welfare schemes under India’s DPI framework.
- PDS Modernization: Synergizes with SMART-PDS, NIRMAL, VLTS, and SAKSHAM for transparent and efficient Public Distribution System.
About Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY)
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