CBDC Powered Digital Public Distribution System in India

Launch of Digital PDS in Gandhinagar

CBDC Powered Digital Public Distribution System in India: The CBDC-based Public Distribution System (PDS) was launched by Union Home Minister Amit Shah in Gandhinagar, Gujarat, marking a significant step in digital governance reforms. This initiative integrates Central Bank Digital Currency (CBDC) with food grain distribution, ensuring transparency and efficiency. It reflects the governance philosophy of ‘Minimum Government, Maximum Governance’, aimed at reducing manual intervention.

The system ensures that subsidized food grains reach eligible citizens through a secure and cashless digital mechanism. This move strengthens India’s commitment to technology-driven welfare delivery and minimizes corruption and leakages.

Static GK fact: The Public Distribution System (PDS) was formally institutionalized in India during the 1960s Green Revolution period to ensure food availability in drought-prone regions.

Understanding CBDC and Its Role

Central Bank Digital Currency (CBDC) is a digital form of legal tender issued by the Reserve Bank of India (RBI). It holds the same value as physical currency but exists in digital form. CBDC transactions are recorded securely, ensuring transparency and reducing financial fraud.

CBDC is classified into Retail CBDC, used by citizens, and Wholesale CBDC, used by financial institutions. In the Digital PDS, CBDC enables direct digital transactions between government and beneficiaries, eliminating intermediaries.

Static GK Tip: The Reserve Bank of India, established in 1935, is the sole authority responsible for issuing currency in India.

Features of the Digital Public Distribution System

The CBDC-based Digital PDS introduces advanced features to improve efficiency and transparency. Beneficiaries receive 5 kg of free food grains per person per month, distributed digitally. This ensures accurate and timely delivery.

A key technological innovation is the ‘Annapurna’ automated ration dispensing machine, capable of distributing 25 kg of food grains within 35 seconds. This machine ensures precise measurement, quality control, and faster service delivery.

The government plans to expand this system nationwide within the next 3 to 4 years, strengthening India’s digital welfare infrastructure.

Role of Digital India and Financial Inclusion

The Digital PDS is built upon the success of the Digital India initiative, launched in 2015 to promote digital infrastructure and financial inclusion. Earlier, nearly 60 crore Indians lacked bank accounts, limiting direct benefit transfers.

Through schemes like Jan Dhan Yojana and Direct Benefit Transfer (DBT), financial inclusion expanded rapidly. Today, India accounts for nearly 50% of global digital transactions, highlighting its leadership in digital payments.

Static GK fact: The Pradhan Mantri Jan Dhan Yojana, launched in 2014, is the world’s largest financial inclusion program.

Strengthening Food Security for Millions

The Public Distribution System currently supports nearly 80 crore beneficiaries under the National Food Security Act, 2013. The Digital PDS ensures efficient delivery, reduces duplication, and improves monitoring.

Digital connectivity has expanded to over 1.07 lakh villages, enabling seamless ration distribution even in remote areas. Real-time tracking ensures transparency, accountability, and proper allocation of resources.

This reform represents a major shift towards digitized welfare governance, ensuring that food security schemes operate efficiently and reach intended beneficiaries without corruption.

Static GK Tip: India operates the largest food security program in the world, managed by the Ministry of Consumer Affairs, Food and Public Distribution.

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CBDC Powered Digital Public Distribution System in India: