The government has taken another major step towards making welfare benefits more digital and transparent. A new Central Bank Digital Currency (CBDC)-based Direct Benefit Transfer system has been launched under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in Chandigarh and Dadra & Nagar Haveli.

The initiative aims to use digital technology to improve the delivery of welfare benefits and reduce the possibility of eligible beneficiaries being left out.

What is changing under the new system?

Under the new system, CBDC technology is being used as part of the Direct Benefit Transfer mechanism associated with PMGKAY.

The government says the move is intended to make welfare delivery more transparent, technology-driven and better targeted.

Why is CBDC being used?

CBDC, or Central Bank Digital Currency, is a digital form of currency issued by the Reserve Bank of India.

The government is exploring how this technology can be used in public-benefit delivery. The objective is to create a system in which transactions can be tracked digitally while improving the efficiency of government transfers.

Which areas are covered initially?

The CBDC-based DBT initiative has initially been launched in:

• Chandigarh
• Dadra & Nagar Haveli

The launch took place on August 14, 2026, under PMGKAY.

This means the initiative is currently limited to the specified Union Territories rather than being a nationwide replacement for the existing system.

Will ration beneficiaries lose their existing benefits?

No. The initiative is intended to improve the way welfare benefits are delivered rather than remove eligible beneficiaries from PMGKAY.

The government has highlighted the objective of ensuring better targeting and reducing the possibility of exclusion of genuine beneficiaries.

Why is this important for ordinary people?

Government welfare programmes involve millions of beneficiaries, making accurate identification and transparent benefit delivery extremely important.

Digital systems can help authorities maintain better records, monitor transactions and identify problems more efficiently. The CBDC-based initiative is therefore part of a broader push towards technology-enabled welfare delivery.

Could the system expand to other states?

The initial rollout in Chandigarh and Dadra & Nagar Haveli provides an opportunity to assess how CBDC can be used in welfare delivery.

If the system proves effective, similar technology could potentially be considered for wider implementation. However, beneficiaries should not assume that the CBDC-based system is already available across India.

For now, people should continue following the existing rules and procedures applicable to their ration and welfare benefits.