CBDC-Based DBT Launched Under PMGKAY in Chandigarh & Dadra & Nagar Haveli
The Indian government has started using Central Bank Digital Currency (CBDC) for Direct Benefit Transfer (DBT) under a key welfare scheme in two Union Territories.
Source: GNews PM SchemeThe Government of India has launched a pilot project for CBDC-based Direct Benefit Transfer (DBT) under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). This initiative began in Chandigarh and Dadra & Nagar Haveli and Daman & Diu. The Reserve Bank of India (RBI) is leading this pilot, which aims to test the efficiency and transparency of digital currency in welfare distribution. Beneficiaries will receive their entitlements directly into their CBDC wallets, reducing intermediaries and potential leakages. This move is part of India's broader strategy to digitize its economy and enhance financial inclusion. The CBDC-based DBT under PMGKAY marks a significant step towards modernizing the delivery of government benefits.
This news is important for competitive exams, especially for topics related to Indian Economy (UPSC GS Paper III) and Government Schemes (UPSC GS Paper II). Aspirants should understand the concept of CBDC, its implications for financial inclusion, and how it integrates with existing welfare programs like PMGKAY. It highlights the government's push for digital transformation and efficient public service delivery, which are recurring themes in exam questions.
- CBDC-based DBT pilot launched under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).
- The pilot project is active in Chandigarh and Dadra & Nagar Haveli and Daman & Diu.
- The Reserve Bank of India (RBI) is overseeing this CBDC pilot program.
- Beneficiaries receive entitlements directly into their CBDC wallets.
- PMGKAY was initially launched in March 2020 during the COVID-19 pandemic.
- The CBDC is also known as the digital rupee.
CBDC is a digital form of a country's fiat currency, issued by the central bank. It is legal tender and can be exchanged one-to-one with the fiat currency. India's CBDC, the digital rupee, aims to provide a secure, efficient, and convenient electronic payment option, reducing reliance on cash and promoting digital transactions.
DBT is a government initiative to transfer subsidies and benefits directly to the bank accounts of beneficiaries. Launched in 2013, it aims to reduce corruption, eliminate intermediaries, and ensure that benefits reach the intended recipients efficiently. DBT covers various schemes, including pensions, scholarships, and food subsidies.
PMGKAY is a food security welfare scheme launched by the Indian government in March 2020. It provides free food grains (5 kg per person per month) to all beneficiaries covered under the National Food Security Act (NFSA). The scheme aims to support vulnerable sections of society, especially during economic hardships.
Exams frequently ask about government initiatives for financial inclusion and digital transformation. Be prepared for questions on the features of CBDC, the objectives of DBT, and the provisions of PMGKAY, often linking them to economic reforms.
Remember 'CBDC-DBT' as 'Cashless Benefits Delivered Transparently' to recall its purpose in welfare schemes like PMGKAY.
Frequently Asked Questions
What is the main objective of using CBDC for Direct Benefit Transfer?
The main objective of using CBDC for Direct Benefit Transfer is to enhance the efficiency, transparency, and speed of welfare payments. It aims to reduce intermediaries, minimize leakages, and ensure that government benefits reach the intended beneficiaries directly and securely in a digital format.
Which Union Territories are part of the CBDC-based DBT pilot under PMGKAY?
The Union Territories currently part of the CBDC-based DBT pilot under PMGKAY are Chandigarh and Dadra & Nagar Haveli and Daman & Diu. These regions have been selected to test the practical implementation and effectiveness of digital currency in welfare distribution.
How does PMGKAY benefit vulnerable sections of society?
PMGKAY benefits vulnerable sections of society by providing free food grains, specifically 5 kg per person per month, to all beneficiaries covered under the National Food Security Act. This scheme helps ensure food security and provides essential support, especially during economic crises or emergencies.