CBDC-based DBT under PMGKAY launched in Chandigarh and DNH
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UPSC has already asked about this. Read the story with these questions in mind.
On 14 August 2026 the Centre launched Central Bank Digital Currency-based Direct Benefit Transfer under PMGKAY in Chandigarh and Dadra and Nagar Haveli. The food subsidy now goes into each beneficiary’s Digital Rupee wallet as purpose-bound tokens, usable only for foodgrains at empanelled shops. It follows pilots in Gujarat and Puducherry in February 2026.
- Date
- 14 Aug 2026
- Scheme
- Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY)
- Where
- Chandigarh and Dadra & Nagar Haveli
- Mode
- programmable CBDC (Digital Rupee) tokens in wallets
- Earlier pilots
- Gujarat (15 Feb 2026), Puducherry (26 Feb 2026)
- Motto
- Har Dana, Har Rupya, Har Adhikar
CBDC-based DBT under PMGKAY: what happened?
Most States give free grain through ration shops. A few Union Territories give the food subsidy as money instead. The risk with cash is that it can be spent on other things or skimmed. A programmable digital rupee can be spent only on foodgrains, so the subsidy reaches its purpose.
- The subsidy goes into the beneficiary’s Digital Rupee wallet, not a bank account.
- It can be used only to buy foodgrains from empanelled merchants.
- Smartphone users pay by QR code; feature-phone users through OTP.
- The two UTs are the first to give the food subsidy to all eligible PMGKAY beneficiaries as CBDC tokens.
- It is the first large-scale use of CBDC in a Central Government welfare programme.
What is CBDC and why is it “programmable”?
- A Central Bank Digital Currency is money issued in digital form by the central bank; India’s is the Digital Rupee.
- Programmable means rules can be attached to it, such as “spend only on foodgrains”.
- This makes the subsidy purpose-bound and traceable.
How has the PDS been digitised?
- Digitised ration cards and beneficiary databases; Aadhaar-based verification; ePoS authentication.
- Online supply-chain management and nationwide portability through One Nation One Ration Card (ONORC).
- ASHA, an AI tool, makes 20 lakh feedback calls to beneficiaries on grain quality and entitlements.
- Other tools named: Rightful Targeting, SMART-PDS, NIRMAL, VLTS and SAKSHAM.
What numbers did officials cite?
| Item | Figure |
|---|---|
| Free ration beneficiaries | more than 80 crore |
| Savings from DBT framework | over ₹4 lakh crore |
| Jan Dhan accounts | more than 59 crore, deposits over ₹3.10 lakh crore |
| UPI, July 2026 | over 2400 crore transactions, more than ₹30 lakh crore |
| UPI share of global real-time payments | nearly 49% |
| ASHA feedback calls | 20 lakh |
How does the CBDC subsidy reach a beneficiary?
- Government credits subsidy as Digital Rupee tokens
- Tokens land in the beneficiary’s CBDC wallet
- Beneficiary visits an empanelled merchant
- Pays by QR code (smartphone) or OTP (feature phone)
- Tokens work only for foodgrains; every transaction is recorded
Why does CBDC-based DBT under PMGKAY matter?
| Angle | What to note |
|---|---|
| Governance | Cuts leakage, diversion and cash handling. |
| Technology | Builds on the JAM trinity: Jan Dhan, Aadhaar, mobile. |
| Monetary | A real use case for the Digital Rupee beyond pilots. |
| Inclusion | OTP access means feature-phone users are not left out. |
| Federal | A template other States and UTs can adopt. |
What are the challenges in CBDC-based DBT under PMGKAY?
- Merchants must be empanelled and willing to accept CBDC.
- Beneficiaries need awareness and digital comfort to use wallets.
- Purpose-bound money limits choice; some families may prefer grain.
- Network failures can block payments at the shop.
- Data from tracked spending needs strong privacy safeguards.
What should be done next on CBDC-based DBT under PMGKAY?
- Study results in the two UTs before scaling up.
- Train beneficiaries and merchants; keep a help line.
- Ensure offline or fallback options.
- Expand to other States, as the Agriculture Minister suggested.
What can Prelims ask on CBDC-based DBT under PMGKAY?
- CBDC-based food subsidy pilots: Gujarat (15 Feb 2026), Puducherry (26 Feb 2026).
- Full rollout to all PMGKAY beneficiaries: Chandigarh and Dadra & Nagar Haveli (14 Aug 2026).
- Programmable CBDC: purpose-bound use.
- JAM trinity: Jan Dhan, Aadhaar, Mobile.
How to write about CBDC-based DBT under PMGKAY in Mains
Practice question (15 marks, 250 words): Programmable digital currency can make welfare delivery leak-proof but raises new concerns. Discuss with reference to CBDC-based DBT under PMGKAY.
- Intro: CBDC DBT in Chandigarh and DNH, 14 Aug 2026.
- How it works: wallet, purpose-bound tokens, QR/OTP.
- Benefits: leakage, traceability, instant transfer.
- Concerns: access, merchants, choice, privacy, network.
- Way forward: evaluation, training, phased scaling.
How to use this in Mains
- As per PIB (2026-08-14): centre launched Central Bank Digital Currency-based DBT under PMGKAY in Chandigarh and Dadra & Nagar Haveli.
- Programmable money can improve targeting.
Quotable data pointCentre launched Central Bank Digital Currency-based DBT under PMGKAY in Chandigarh and Dadra & Nagar Haveli.
PIB: Food: CBDC-based DBT under PMGKAY, 14 Aug 2026
Exam angle
Prelims: e-rupee.
Practice MCQs
Original practice questions (not PYQs).
With reference to the CBDC-based food subsidy under PMGKAY, consider the following:
1. The subsidy is credited to the beneficiary's bank account.
2. It can be used only to buy foodgrains from empanelled merchants.
3. Feature-phone users can pay through OTP.
Which are correct?
Answer (b) & explanation
PIB (Food and PD), 14 Aug 2026: the subsidy goes to a Digital Rupee wallet, not a bank account.
The first pilot of CBDC-based food subsidy delivery in 2026 was launched in
Answer (c) & explanation
PIB (Food and PD), 14 Aug 2026: Gujarat, 15 Feb 2026.
Questions students ask about this
What is CBDC-based DBT under PMGKAY?
A system where the food subsidy is sent as programmable Digital Rupee tokens to beneficiaries' wallets, usable only for foodgrains.
Where was it launched on 14 August 2026?
In Chandigarh and Dadra and Nagar Haveli, for all eligible PMGKAY beneficiaries.
Where were the pilots held?
In Gujarat from 15 February 2026 and Puducherry from 26 February 2026.
How can people without smartphones use it?
Feature-phone users can pay through an OTP-based mechanism.
Keep studying
Go deeper
Official source: PIB: Food: CBDC-based DBT under PMGKAY, 14 Aug 2026
facts from cited sources only; faculty review pending