There is important news for ration card holders. The Modi government has started a pilot project of Central Bank Digital Currency (CBDC) in the Public Distribution System (PDS) in Gujarat.
Under this scheme, beneficiaries will receive digital coupons called e-Rupee.
These digital coupons will be sent directly to their digital wallets and can be used only to buy food grains from ration shops.
The government says this new system will make ration distribution more transparent and efficient. Earlier, subsidies were given in cash or through normal digital transfers.
Now, digital currency will ensure that the money is used only for buying ration. Beneficiaries will not be able to spend this digital money on anything else.
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How the Scheme Will Prevent Fraud
Experts believe this system can reduce fraud and misuse. Many times, subsidy money is misused or complaints of diversion are reported. With digital food currency, the government can directly track how the funds are used.
This will also help the government control and monitor its spending better.
This initiative is part of India’s digital economy push. The country has already introduced digital systems in ration distribution, such as e-POS machines
and the One Nation, One Ration Card scheme. By adding digital currency to the PDS, the government aims to take digitization to the next level.
Challenges in Implementation
Despite its benefits, the scheme faces some challenges. Many people in rural and remote areas do not have smartphones or reliable internet access. Lack of digital knowledge can also create problems.
Beneficiaries may struggle if they cannot properly use digital wallets. There are also concerns about cybersecurity and data privacy.
Expansion Plan Across India
Puducherry will also start giving free rations through CBDC this week. After that, the scheme will expand to Chandigarh and other Union Territories. Under this system, the RBI will send CBDC directly to the e-wallets of eligible beneficiaries.
The government plans to implement this system across the country in the next three to four years.
Experts say that if successful, India could become a global example in using digital currency for welfare schemes. This could make subsidy delivery more transparent, secure, and effective.
India Leading in Digital Welfare Delivery
India’s move follows the global trend of digital welfare distribution, but using CBDC makes it unique. Other countries already use electronic benefit systems.
For example, the US Supplemental Nutrition Assistance Program (SNAP) and Brazil’s Bolsa Familia provide benefits through electronic cards. The UK’s Healthy Start program also uses prepaid cards for nutrition support.