India launches CBDC-based welfare payments

The Government of India has launched the Central Bank Digital Currency (CBDC)-based Direct Benefit Transfer (DBT) under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in the Union Territories of Chandigarh and Dadra & Nagar Haveli.

Under the new system, the food subsidy will be transferred directly into the beneficiary’s Digital Rupee wallet, instead of a conventional bank account. The beneficiary can then use the purposebound digital subsidy to purchase foodgrains from empanelled merchants through a secure and traceable digital payment mechanism. The system has also been designed to improve accessibility. Smartphone users can make payments through QR codes, while feature-phone users can access the facility through OTP-based mechanisms. With this launch, Chandigarh and Dadra & Nagar Haveli have become the first State/Union Territory in the country to operationalize food subsidy transfers to all eligible PMGKAY beneficiaries in the form of programmable Central Bank Digital Currency (CBDC Digital Rupee) tokens directly into their CBDC wallets. The initiative builds on earlier pilots conducted in Gujarat and Puducherry. The CBDC-based food subsidy delivery pilot was first launched in Gujarat on 15 February 2026, followed by Puducherry on 26 February 2026. Drawing on the experience and learnings from these pilots, the Government of India has now expanded the initiative to Chandigarh and Dadra & Nagar Haveli.