Centre launches CBDC-based DBT pilot for foodgrain distribution in Chandigarh

Why in News?

The Union Agriculture and Farmers’ Welfare Minister on 14 August 2026 launched a pilot project in Chandigarh to deliver Direct Benefit Transfer (DBT) under the Public Distribution System (PDS) through Central Bank Digital Currency (CBDC). The initiative aims to make foodgrain-related assistance more transparent, secure and timely.

The Chandigarh pilot is intended to serve as a model for possible nationwide expansion if the system proves successful.

Key Points

Under the new mechanism, financial assistance meant for the purchase of ration and foodgrains will be transferred directly to beneficiaries through CBDC, with technological safeguards ensuring that the funds are used only for eligible food purchases.

Unlike conventional DBT, where money is transferred directly into a beneficiary’s bank account and can potentially be used for purposes other than those intended, the CBDC-based system will restrict the use of the benefit to specified food items.

The new system will also provide beneficiaries with greater flexibility in choosing commodities. In addition to wheat and rice, beneficiaries will be able to opt for pulses and other essential food items.

The pilot will be evaluated on the basis of its implementation and outcomes. If successful, the system could be gradually expanded to other parts of the country.

Smartphone users can make payments through QR codes, while feature-phone users can access the facility through OTP-based mechanisms.

About CBDC or Digital Rupee

The Digital Rupee (e₹) is India’s Central Bank Digital Currency (CBDC) issued by the Reserve Bank of India (RBI). It is the digital form of the Indian rupee and has the same value as physical currency.

The e₹ has characteristics similar to physical cash, including legal-tender status, RBI-backed guarantee and finality of settlement.

The Digital Rupee is stored in a digital wallet and can be used to send or receive money and make transactions, similar to physical currency.

The RBI creates and issues e₹ electronically to banks and non-banks, which facilitate customer onboarding and provide e₹ wallets through mobile devices.

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