PIB TrackerFood subsidy paid in programmable digital rupees
Chandigarh and Dadra & Nagar Haveli become the first UTs to pay PMGKAY food subsidy as programmable CBDC tokens into beneficiary wallets, spendable only with empanelled merchants.
What happened
- CBDC-based DBT under PMGKAY launches in Chandigarh and Dadra & Nagar Haveli on 14 August 2026.
- They are the first UTs to pay food subsidy as programmable CBDC tokens.
- Beneficiaries receive Digital Rupee tokens into CBDC wallets, not bank accounts.
- The subsidy is spendable on foodgrains only with empanelled merchants.
- It builds on earlier pilots in Puducherry and Gujarat, now at full saturation.
For Prelims
- CBDC: Central Bank Digital Currency — the Digital Rupee (e₹), a liability of the Reserve Bank of India, unlike bank deposits.
- Programmable CBDC: tokens carrying conditions of use — here, purpose- and merchant-restricted.
- Retail vs wholesale CBDC: retail (e₹-R) is for the public; wholesale (e₹-W) for interbank settlement.
- PMGKAY: the Pradhan Mantri Garib Kalyan Anna Yojana, the free foodgrain scheme subsuming NFSA entitlements.
- First UTs: Chandigarh and Dadra & Nagar Haveli; earlier pilots in Puducherry and Gujarat.
- Why it differs from DBT: ordinary DBT credits a bank account and is fungible; a CBDC token can be restricted to a purpose.
- Legal basis: CBDC was enabled by an amendment to the RBI Act, 1934 in the Finance Act, 2022.
For UPSC: The most forward-looking DPI item of the month. Use it for CBDC and programmable money, DBT and leakage in food subsidy, financial inclusion through wallets, and the autonomy question that conditional money raises.
What it is NOT: Programmability is not a neutral technical feature — it converts an unconditional entitlement into money the state can restrict by purpose and merchant, which is the design question the pilot is meant to test.
For Mains
Syllabus: GS2.10 · GS3.1 · Linkage L1
Anchor
Money that knows what it may be spent on is a different instrument from cash — and welfare is where India is testing it first.
Substantiation (data)
Full-saturation rollout to all eligible PMGKAY beneficiaries in Chandigarh and Dadra & Nagar Haveli from 14 August, after pilots in Puducherry and Gujarat.
Exemplification
Tokens land in a CBDC wallet and are redeemable for foodgrains only at empanelled merchants, giving an end-to-end audit trail.
Problematisation
Restricting where a benefit can be spent constrains beneficiary choice and concentrates power in whoever decides empanelment; wallet-based delivery also assumes a working smartphone.
Way-forward
Publish leakage and redemption data against the bank-transfer baseline, and set clear limits on what programmability may condition.
Position
Traceable welfare is worth having — but a conditional rupee is a policy choice, not a payment upgrade.
Deploys into: Government interventions + the economy (GS2.10, GS3.1) · CBDC and programmable money, DBT and food subsidy leakage, and financial inclusion through wallets.
Ministry of Consumer Affairs, Food and Public Distribution · 2026-08-12 · PRID 2298531 · PIB source ↗