The digital rupee pilot that pays Puducherry's food subsidy, behind the Union Territory's ration card measures

Background

Puducherry's ration card holders are in the news again this week over the Union Territory's grocery measures, and the Union Territory is also where the Government of India runs its Central Bank Digital Currency based Food Subsidy Distribution Pilot under the Pradhan Mantri Garib Kalyan Anna Yojana. The digital rupee, or e-rupee, is a tokenised digital version of the Indian rupee issued by the Reserve Bank of India as a Central Bank Digital Currency. Under the pilot, food subsidy is credited to identified beneficiaries as programmable CBDC tokens in their CBDC wallets, redeemable only for entitled foodgrains at authorised merchants and Fair Price Shops, so the subsidy can be used for nothing else. The pilot is run with the Government of Puducherry, the Reserve Bank of India, the Public Financial Management System and Canara Bank as the designated banking partner. It was inaugurated by the Union Minister for Consumer Affairs, Food and Public Distribution, Pralhad Joshi.