What happened: CBDC-based DBT under PMGKAY to launch in two Union Territories

The Government of India announced that the Central Bank Digital Currency (CBDC)-based Direct Benefit Transfer (DBT) under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) will be launched in the Union Territories of Chandigarh and Dadra & Nagar Haveli on 14 August 2026. The launch event is scheduled to be graced by Union Minister for Consumer Affairs, Food and Public Distribution, Shri Pralhad Joshi; Governor of Punjab and Administrator, U.T. Chandigarh, Shri Gulab Chand Kataria; Union Minister for Agriculture and Farmers Welfare, Shri Shivraj Singh Chouhan; and Minister of State for Consumer Affairs, Food and Public Distribution, Smt. Nimuben Jayantibhai Bambhaniya, along with other dignitaries.

Background and earlier position: food subsidy transfers moving from bank transfers to CBDC wallets

The announced CBDC-based DBT model is presented as a continuation of earlier pilot implementations in Puducherry and Gujarat. According to the Government’s announcement, Chandigarh and Dadra & Nagar Haveli are expected to become the first Union Territories to operationalize food subsidy transfers to all eligible PMGKAY beneficiaries in the form of programmable CBDC tokens directly into their CBDC wallets.

What the CBDC-based DBT model claims to do now

Under the CBDC-based DBT model for PMGKAY, the Government announcement states the following flow and features: Beneficiary delivery change: eligible PMGKAY beneficiaries receive the food subsidy directly into their CBDC wallets instead of receiving conventional bank account transfers. Token nature: the subsidy is delivered as programmable Central Bank Digital Currency tokens (referred to as “Digital Rupee” in the announcement). Usage for food purchase: beneficiaries can use the subsidy to purchase foodgrains from empanelled merchants. Payment and traceability: merchant payments are described as secure, traceable, and real-time digital payments.

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