A parliament panel on Thursday recommended phased expansion of the RBI’s recently launched central bank digital currency (CBDC) based food subsidy distribution to improve efficiency in implementing the free ration scheme.
Through CBDC food coupons launched as pilots can be expanded through leveraging its report submitted in parliament that CBDC food coupons, launched as pilots, can be expanded by leveraging features like instant transfers, auditability, and restricted usage to improve subsidy delivery efficiency.
Under the CBDC pilot, a limited number of beneficiaries who complete eKYC can scan the fair price shop (FPS) QR code to redeem their food coupons and collect foodgrains and other items in parts of Gujarat and Puducherry. The government is likely to roll out more pilots to ascertain the feasibility of using digital currency to plug leakages in the PDS.
The panel noted that the digital currency offers an opportunity to enhance DBT coverage by providing a secure, instant, traceable, and programmable digital cash mechanism for Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) beneficiaries.
Assessing DBT Cash Transfer
The panel also recommended a periodic comparative assessment of cash transfer implemented in a few union territories (UTs) and physical distribution of food grains for the beneficiaries under the free ration schemes on various parameters before scaling up the DBT model.
“The department (food and public distribution) should undertake a structured and periodic comparative assessment of the DBT cash transfer model in these UTs vis-a-vis physical distribution on parameters such as beneficiary convenience, adequacy and timeliness of subsidy, grievance levels, transparency and exclusion risks, before contemplating any wider replication (of DBT),” the panel stated.
Cash transfer under the food subsidy initiative is currently implemented in the UTs of Chandigarh and Puducherry and urban parts of Dadra and Nagar Haveli since 2015-16. Under DBT, Rs 200 crore was released in FY26.
According to a panel report, free food grains of 5 kg each monthly for 800 million PMGKAY beneficiaries are currently supplied with an annual subsidy outlay of about Rs 2.4 lakh crore.
Expanding Coverage
The panel has also urged the food ministry to add 7.9 million additional beneficiaries as 813 million beneficiaries can avail free food grain under the food security act. It urged the food ministry to impress upon all States/UTs to undertake sustained verification drives and prompt inclusion of left-out eligible households within the available ceiling, especially among vulnerable groups.
This would ensure the existing statutory coverage is fully utilized in favour of genuine beneficiaries under the free ration scheme.
“The verification of red-flag beneficiaries should be completed in a time-bound mission mode with mandatory field investigation. At the same time, utmost care must be taken to prevent wrongful exclusion of eligible beneficiaries through robust safeguards and grievance redressal mechanisms,” the panel has noted.
The report stated that about 6.77 crore ration cards were weeded out between 2013 and December 2025, because of Aadhaar seeding of beneficiaries. Out of about 20.5 crore ration cards Aadhaar seeding of more than 99.8% of ration cards and 99.3% of beneficiaries have been completed.
