India launches CBDC-based digital food currency pilot in Puducherry

The Government on Thursday launched a pilot project using Central Bank Digital Currency (CBDC) to distribute food subsidies under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in Puducherry. The initiative seeks to make the delivery of food benefits more transparent, efficient and secure.

The event was attended by Lieutenant Governor K. Rangasamy, and senior officials from the Centre and the Union Territory administration.

What Happened

These digital coupons, generated by the Reserve Bank of India, will be transferred to beneficiaries’ CBDC wallets. Beneficiaries can redeem the digital coupons to purchase their entitled foodgrains at Fair Price Shops and authorised merchant outlets.

• The pilot was inaugurated on February 26, 2026, in Puducherry by Union Minister for Consumer Affairs, Food and Public Distribution Pralhad Joshi.

• Under the new system, the food subsidy will be credited directly to beneficiaries in the form of programmable digital currency, known as e₹.

• The government noted that PMGKAY is among the world’s largest food security programmes, providing free foodgrains to over 80 crore beneficiaries.

Key Details

The digital currency is purpose-bound and can be used only for buying foodgrains, ensuring that the subsidy is utilised for its intended objective. Speaking at the launch, the Union Minister described the introduction of CBDC into the Public Distribution System (PDS) as.

• Beneficiaries will also be able to locate nearby authorised shops through the application.

• Special provisions have been made to include feature phone users to ensure wider outreach.

• The Secretary of the Department of Food and Public Distribution said the system builds upon the Jan Dhan–Aadhaar–Mobile (JAM) framework and further advances digital empowerment.

Why It Matters

He said the initiative would enhance transparency, reduce leakages and empower beneficiaries by providing greater clarity about their entitlements.

• Officials said the free foodgrain programme has helped reduce household expenditure on food, enabling families to allocate savings toward other essential and nutritious items.

• In addition to wheat and rice, millets are also being distributed to strengthen nutritional security.

What Reports Say

Coverage of the story so far points to:

• Continued reporting by DD News as more details emerge