The Government of India to Launch the Central Bank Digital Currency (CBDC)-Based Direct Benefit Transfer (DBT) in the Union Territories of Chandigarh and Dadra & Nagar Haveli

Key Highlights:

• The Government of India will launch Central Bank Digital Currency (CBDC)-based Direct Benefit Transfer (DBT) under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).
• The launch is scheduled for August 14, 2026, in the Union Territories of Chandigarh and Dadra & Nagar Haveli.
• These will be the first Union Territories to operationalize food subsidy transfers to eligible beneficiaries via programmable CBDC tokens.
• Beneficiaries will receive food subsidy directly into their CBDC wallets for purchasing foodgrains from empanelled merchants.

Detailed Insights:

• This initiative marks a significant step towards a modern, transparent, and technology-driven welfare delivery ecosystem in India.
• The rollout builds on earlier pilot implementations of CBDC in Puducherry and Gujarat.
• The CBDC-enabled DBT model aims to ensure transparent and end-to-end traceable delivery of public funds.
• It seeks to reduce leakages, diversion, and cash handling associated with traditional subsidy mechanisms.
• The system will facilitate instant and secure transfer of benefits and promote financial inclusion through simple wallet-based transactions.
• This rollout is envisioned as a proof of concept and a scalable template for adoption by other States and Union Territories.

Key Concepts Involved:

• Central Bank Digital Currency (CBDC): A digital form of a country's fiat currency, issued and regulated by the central bank.
• Direct Benefit Transfer (DBT): A government scheme to transfer subsidies directly to beneficiaries' bank accounts or digital wallets.
• Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY): A food security welfare scheme providing free food grains to eligible beneficiaries.