New Delhi, Feb. 25 -- New Delhi: In a significant shift in the way food subsidies are delivered, the government will launch a central bank digital currency (CBDC)-based pilot under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in Puducherry on 26 February. The move is aimed at making these benefits better targeted, traceable and purpose-bound.

The pilot will test operational challenges, including digital literacy, access to CBDC wallets and merchant readiness at fair price shops. The experience will be used to refine the model before expanding it to other states and Union Territories in a phased manner, the ministry of food said in a statement on Wednesday.

PMGKAY, which provides free foodgrains to eligible beneficiaries under th...