Chandigarh, May 4: The Central Government is prepared to initiate a pilot programme in Chandigarh this June that integrates the Reserve Bank of India’s digital currency into the food subsidy distribution network. This shift will see Public Distribution System (PDS) beneficiaries receiving digital tokens via a specialized wallet under the Central Bank Digital Currency (CBDC) framework, rather than collecting physical foodgrains from ration shops.
The initiative is designed to address recurring challenges in the current system, such as stock shortages and the distribution of reduced entitlements to those who visit fair price shops late in the month. By utilizing CBDC, the government aims to ensure the subsidy is used exclusively for its intended purpose, as the programmable tokens can only be redeemed for essential commodities like wheat and rice.
“The initiative would improve transparency, efficiency and targeted delivery, as it would plug gaps in the existing distribution system,” government officials stated.
The system caters to various levels of technological access, allowing smartphone users to operate a digital wallet while feature phone users receive redemption codes. To ensure no one is left behind, the existing physical distribution channel will remain available for those without electronic devices. Officials reaffirmed that the pilot will not alter the National Food Security Act entitlements or existing procurement mechanisms.
“The physical ration distribution system would continue to operate alongside the digital model to ensure no beneficiary was excluded,” authorities affirmed.
