CBDC-Based DBT Launches in Chandigarh and Dadra & Nagar Haveli

India is scheduled to launch a Central Bank Digital Currency-based Direct Benefit Transfer system for food subsidies under the Pradhan Mantri Garib Kalyan Anna Yojana on 14 August 2026. Chandigarh and Dadra & Nagar Haveli will become the first Union Territories to fully operationalise food subsidy transfers through programmable Digital Rupee tokens credited directly to beneficiaries’ CBDC wallets.

Central Bank Digital Currency and Digital Rupee

A Central Bank Digital Currency is a digital form of sovereign currency issued by a central bank. In India, the Digital Rupee is the retail CBDC issued by the Reserve Bank of India and represented by the symbol e₹.

CBDC systems use digital wallets for storage and transfer of value. They differ from bank deposits because the liability remains with the central bank rather than a commercial bank.

Direct Benefit Transfer under PMGKAY

Direct Benefit Transfer is a mechanism for transferring subsidies and welfare payments directly to eligible beneficiaries. Under this model, the subsidy amount is deposited into digital CBDC wallets instead of moving through conventional bank transfer channels.

Pradhan Mantri Garib Kalyan Anna Yojana is a food security scheme linked to subsidised foodgrain distribution. The scheme covers designated foodgrains such as wheat and rice for eligible beneficiaries.

Programmable Tokens and Operational Features

Programmable Digital Rupee tokens can be restricted for specific uses through built-in conditions. In this case, the tokens are designed for purchasing designated foodgrains from empanelled merchants through QR code scans.

The system is structured to reduce cash handling and to create an end-to-end digital record of subsidy movement. It also bypasses conventional bank transfers by moving the subsidy directly into CBDC wallets.

Prior CBDC pilot initiatives were conducted in Gujarat, Puducherry, and Chandigarh before the full saturation model in these Union Territories.

Important Facts for Exams

• The Digital Rupee is India’s central bank digital currency and is issued by the Reserve Bank of India.
• Direct Benefit Transfer is used in India for the direct transfer of subsidies and welfare payments.
• Pradhan Mantri Garib Kalyan Anna Yojana is associated with foodgrain support for eligible beneficiaries.
• Programmable CBDC tokens can be restricted to specific goods or merchants through digital controls.

Union Territories and Launch Event

Chandigarh and Dadra & Nagar Haveli are Union Territories of India. The launch event on 14 August 2026 is scheduled to involve Union Minister Pralhad Joshi, Punjab Governor Gulab Chand Kataria, Union Agriculture Minister Shivraj Singh Chouhan, and Minister of State Nimuben Jayantibhai Bambhaniya.

Union Minister Pralhad Joshi is set to remotely launch the Dadra & Nagar Haveli phase from Chandigarh on the same day.