Centre to test RBI-enabled digital food coupons for free rations

NEW DELHI: Government is set to roll out a pilot for Central Bank Digital Currency (CBDC) or ‘digital food currency’ under the free ration scheme to a limited number of beneficiaries in Chandigarh, Puducherry and three districts of Gujarat next month. Under this, beneficiaries will receive monthly digital food coupons directly into an RBI-enabled digital wallet on their mobile phones and they will get the entitled free foodgrains from ration shops by simply scanning the shop owners’ QR code to redeem the coupons.

This initiative is aimed at bringing greater transparency and plugging any leakage in the world’s largest free food security programme and relieving ration card holders from the hassle of biometric authentication. People aware about the plan said this will be conducted as a Proof of Concept (POC) for the “digital food currency” across three regions and will be at a small-scale to demonstrate the feasibility, functionality, and practical potential of the initiative.

Government will also set a timeframe for using the digital coupon to avoid accumulation. Earlier this month, a soft launch was done in Ahmedabad with 25 beneficiaries. A state government official said since then around 2,000 transactions have been completed successfully. The pilot to be rolled out next month will cover Anand, Sabarmati and Dahod.

In the case of Chandigarh and Puducherry, Centre had rolled out Direct Benefit Transfer (DBT) scheme for foodgrains in 2015, which replaced physical foodgrain distribution with direct cash transfers to beneficiaries’ bank accounts. Officials said the digital food currency will ensure that beneficiaries are using the subsidy only for buying foodgrains and for no other purpose.

Since there has been no provision of distribution of foodgrains in these two UTs, there are no ration shops. Officials said the authorities are exploring how certain outlets can be identified for distribution of free foodgrain by accepting the digital currency. They added that the free foodgrains which will be distributed through these outlets or ration shops will be supplied by the Food Corporation India (FCI) or state government agencies.

Officials said options are also being explored to see that beneficiaries who still use basic or feature phones and hence can’t use the ewallet, can use the digital food food currency.


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