Milestone Reform in Public Distribution System
The pilot was inaugurated by Union Minister for Consumer Affairs, Food and Public Distribution Shri Pralhad Joshi in the presence of Puducherry Lieutenant Governor Shri K. Kailashnathan and Chief Minister Shri N. Rangasamy.
Calling the initiative a transformative milestone, the Minister said the integration of the Digital Rupee into the Public Distribution System (PDS) would significantly enhance transparency, efficiency and beneficiary empowerment. He described the reform as a step toward ensuring “Every grain, Every rupee, Every entitlement” reaches its rightful beneficiary.
Under the new framework, digital coupons generated through the Reserve Bank of India will be credited directly to beneficiaries as programmable digital currency (e₹). These tokens can be redeemed exclusively for purchasing entitled foodgrains at authorised Fair Price Shops and designated merchant outlets.
Transparent and Purpose-Bound Subsidy Transfer
Officials said the CBDC-based system addresses challenges linked to biometric authentication and e-POS operational issues while ensuring secure, real-time and traceable transactions. By restricting usage to foodgrain purchases, the subsidy remains purpose-bound and protected from diversion.
The Minister highlighted that PMGKAY remains the world’s largest food security programme, providing wheat, rice and millets to over 80 crore beneficiaries. He noted that international organisations have acknowledged that nearly 25 crore people have moved out of multidimensional poverty over the past decade.
He further stated that free foodgrain distribution has reduced household expenditure on food by nearly half, allowing families to spend savings on milk, vegetables and other nutritious items. This, he said, contributes to both food and nutrition security.
Expansion Plans and Digital Empowerment
The pilot, initially rolled out for a limited group of beneficiaries in Puducherry, will soon expand to additional states and Union Territories. After assessing outcomes, a broader national rollout will be considered.
The Secretary, Department of Food and Public Distribution, said the initiative builds upon the Jan Dhan-Aadhaar-Mobile (JAM) trinity and strengthens digital empowerment. Special provisions have been made to ensure inclusion of feature phone users and enable beneficiaries to locate nearby authorised outlets through the application.
Following Puducherry, the CBDC-based PDS model is expected to be introduced in Chandigarh and Dadra and Nagar Haveli, marking the next phase of expansion.
Strengthening Last-Mile Governance
Over the years, the Department of Food and Public Distribution has digitised ration cards, implemented nationwide portability under One Nation One Ration Card (ONORC), deployed e-POS devices for Aadhaar-enabled authentication, and introduced dashboards for rightful targeting.
Digital supply-chain initiatives such as Ann Chakra and grievance redressal systems like Ann Sahayata have further enhanced accountability. The CBDC-based Digital Food Currency now integrates a sovereign digital payment layer into this architecture, strengthening last-mile delivery.
Addressing the gathering, the Lieutenant Governor of Puducherry described the launch as a historic day for the Union Territory. He emphasised that food security is a fundamental right and reaffirmed the government’s commitment to eliminating middlemen and corruption.
Chief Minister N. Rangasamy welcomed the reform, stating that direct transfer into CBDC wallets would empower beneficiaries and boost confidence by eliminating intermediaries. He reiterated Puducherry’s support for the pilot and expressed optimism about its positive impact on transparency and efficiency.
Technology Meets Welfare
The pilot represents a significant leap in integrating technology with welfare delivery. By leveraging the Digital Rupee issued by the Reserve Bank of India, the government aims to build a more accountable, citizen-centric and transparent food distribution system.
The launch in Puducherry signals the beginning of a new chapter in India’s digital governance journey, where innovation and welfare converge to strengthen food security for millions.
