The government on Sunday will roll out a pilot of using RBI’s central bank digital currency (CBDC) for publicdistribution system in Gujarat for the beneficiaries availing freefoodgrains under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY)and other food items provided by state government.
Home and Cooperation Minister Amit Shah will launch the pilot in four Gujarat districts—Ahmedabad, Anand, Sabarmati and Valsad –where a limited number of beneficiaries after eKYC will be able to simply scan the fair price shop (FPS) QR code to redeem their food coupons and collect foodgrains and other items.
The aim, according to a senior official of the state, is to ensure that the subsidy and benefits reach beneficiaries and prevent diversions.
Enhancing Ease of Access
“After we received encouraging response from both from beneficiaries and FPSs owners at proof of concept for CBDC through limited launch, we will expand CBDC based payment system to rest of the 7.5 million ration cards in the state,” Mona Khandar, Additional Chief Secretary, Food, Civil Supplies andConsumer Affairs Department, told FE.
This would relieve ration card holders from biometric authentication hassles at FPSs, Khander said
The food ministry would soon introduce similar pilots in urban areas of Dadra and Nagar Haveli, Chandigarh, and Puducherry. This would relieve ration card holders from biometric authentication hassles at FPSs, and the government can track whether beneficiaries use these coupons for food purposes or not.
The beneficiaries under the PMGKAY would receive monthly digital food coupons directly into an RBI-enabled digital wallet on their mobile phones on the first day of the month.
Instead of cash transfer of food subsidy into the Aadhaar-linked bank accounts of beneficiaries, they can further redeem it at the merchant or retail shop to procure items, which the government can track.
Targeted Subsidies
The vouchers will act as digitalcurrency equivalents, without any cash payment redeemable only forspecified food commodities. Under PMGKAY, 810 million people are currently being provided 5 kg each of specified grains such as rice and wheat per month free of cost through around 0.5 million FPSs which have electronic-point of sale (e-PoS) machines.
In 2015, the government had rolled out Direct Benefit Transfer (DBT) inChandigarh and Puducherry, which replaced physical foodgraindistribution with direct cash transfers to beneficiaries’ bankaccounts.