India Launches Digital Rupee-Based Food Benefit System

Under the new system, eligible beneficiaries will receive assistance through CBDC, commonly referred to as the digital rupee, with technological safeguards limiting how the funds can be spent.

India has launched a Central Bank Digital Currency (CBDC)-based Direct Benefit Transfer system in Chandigarh, introducing a new way for food assistance to reach beneficiaries while restricting the transferred funds to purchases of foodgrains and other essential food items.

Union Agriculture and Farmers' Welfare and Rural Development Minister Shivraj Singh Chouhan launched the system at Tagore Theatre in Chandigarh at an event chaired by Punjab Governor Gulab Chand Kataria. Union Minister Pralhad Joshi and Minister of State Nimuben Jayantibhai Bambhaniya were among those attending the programme.

The Chandigarh pilot will test whether programmable digital currency can make the Public Distribution System (PDS) more transparent and secure while giving beneficiaries more choice over the food products they purchase.

Digital funds designed specifically for food purchases

Under the new system, eligible beneficiaries will receive assistance through CBDC, commonly referred to as the digital rupee, with technological safeguards limiting how the funds can be spent. The money will be available for ration and essential food purchases rather than being transferable for unrelated expenses.

Chouhan said conventional DBT has helped government benefits reach account holders directly and reduced opportunities for intermediaries and irregularities, while cash transfers can still be spent on purposes different from those for which the assistance was provided.

The CBDC model has been designed to address that issue without limiting beneficiaries solely to wheat and rice, with recipients also expected to have the option of buying pulses and other essential food commodities covered by the system.

Chandigarh will serve as the testing ground for the model, with the government considering a gradual nationwide expansion if the pilot delivers the expected results.

Food security remains at the centre of the programme

Chouhan linked the initiative with the government's wider food security policies, including the Pradhan Mantri Garib Kalyan Anna Yojana, which provides free foodgrains to more than 800 million people. He said food support does more than protect families from hunger because lower spending on basic food requirements can leave households with additional money for education and other everyday needs.

The Minister also pointed to India's stocks of wheat and rice as evidence of the country's ability to meet domestic requirements while retaining the capacity to export when circumstances permit.

Speaking about farmers, Chouhan said their interests would remain central to government decisions involving agricultural policy, international agreements and food security. He also cited the direct delivery of benefits through schemes such as PM-KISAN as part of efforts to make government support more transparent.

Chandigarh pilot could shape wider rollout

The government plans to study the performance of the Chandigarh experiment before taking the CBDC-based food benefit model to other parts of the country, placing responsibility on officials to identify practical problems and ensure eligible families can use the system without unnecessary difficulties.

Chouhan said technology should translate government policy into visible improvements in people's daily lives rather than remaining limited to administrative processes. He connected that approach with other rural development priorities, including the government's target of helping 60 million rural women become financially prosperous under the Lakhpati Didi initiative by 2029.

During the programme, Chouhan also spoke about disruptions in Parliament, saying debate is an essential part of democracy while disruption undermines the democratic process. He called on citizens to take part in the Har Ghar Tiranga campaign, honour the contribution of freedom fighters, fulfil their civic responsibilities and support environmental activities such as tree planting.