The government aims to gradually scale up the use of the RBI’s central bank digital currency (CBDC) for food subsidy distribution to improve efficiency in the free ration scheme, a food ministry official said.
“We will gradually move from providing free foodgrains to beneficiaries using electronic – point of sale (ePoS) machines at Fair Price Shops (FPS) to CBDC based food coupons for reducing leakages and diversion of foodgrains,” the official told FE.
The officials said that the roll out of CBDC would be expanded through several pilots where both e-PoS machine-based delivery and digital food coupons would be available to beneficiaries under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).
Since its launch as a part of pilot in Gujarat earlier this year, the CBDC food coupons has been programmed for the eligible foodgrain commodity, which can be used only at empanelled FPSs in the state. A limited number of beneficiaries who complete eKYC currently scan the FPS QR code to redeem their food coupons and collect foodgrains and other items in parts of Gujarat.
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Instead of direct cash transfer (DBT) of food subsidy into the Aadhaar-linked bank accounts of beneficiaries in Chandigarh (60,000), Puducherry (over 0.1 million) and some urban centres of Dadar and Nagar Haveli (13,000) now can redeem food coupons at the merchant or retail shop to procure items, which the government can track.
In Chandigarh, the beneficiaries in lieu of 5 kg rice or wheat, would receive Rs 186/per ahead per month in the digital wallets of ration card holders of the family. The rollout of CBDC food coupons was launched in Chandigarh on Friday by food minister Prahlad Joshi and agriculture minister Shiraj Singh Chouhan.
The official had said that the digital currency would address challenges related to biometric authentication and e-POS operational issues while ensuring secure, traceable, and real-time transactions.
This would relieve ration card holders from biometric authentication hassles at FPSs, and the government can track whether beneficiaries use these coupons for food purposes or not, the official said.
Last month a parliamentary panel recommended expansion of CBDC food coupons leveraging features like instant transfers, auditability, and restricted usage to improve subsidy delivery efficiency.
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Under PMGKAY, 810 million people are currently being provided 5 kg each of specified grains such as rice and wheat per month free of cost through around 0.5 million FPSs which have e-PoS machines.
According to a panel report, the cost of supplying free food grains to PMGKAY beneficiaries currently costs an annual subsidy outlay of about Rs 2.4 lakh crore.
In 2015, the government rolled out DBT in Chandigarh and Puducherry, which replaced physical foodgrain distribution with direct cash transfers to beneficiaries’ bank accounts. Under DBT, Rs 200 crore was released in FY26.
TOPICSdigital currencyThis article was first uploaded on August fourteen, twenty twenty-six, at thirty-six minutes past eleven in the night. © The Indian Express (P) Ltd