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Food Procurement and Distribution – PDS & NFSA, Shanta Kumar Committee, FCI restructuring, Buffer stock, etc.

CBDC Based Public Distribution System Launched in Gujarat

Prelims Only | Economics | Mains Paper 3: PDS, Buffer Stock & Food Security

Why in the News?

The Union Home Minister launched a Central Bank Digital Currency based Public Distribution System in Gandhinagar, Gujarat. This marks the integration of digital currency into the food security delivery mechanism.

What is CBDC?

  • Central Bank Digital Currency is a digital form of sovereign currency issued and regulated by a central bank.
  • In India, the digital rupee is issued by the Reserve Bank of India.
  • It is different from cryptocurrency because it is legal tender and backed by the government.

What is the Public Distribution System?

  • The Public Distribution System is a food security system that distributes subsidised food grains to eligible beneficiaries under the National Food Security framework.
  • Around 80 crore beneficiaries receive free food grains under the scheme.

Key Features of CBDC Based PDS

  1. Digital transfer and settlement using CBDC.
  2. Reduction of leakages and middlemen.
  3. Transparent and traceable transactions.
  4. Faster and automated grain dispensing via Annapurna machine.
  5. Planned nationwide rollout within 3 to 4 years.

The Annapurna machine reportedly dispenses 25 kg of food grains in about 35 seconds.

Governance Linkages

  • Linked to Digital India initiative.
  • Inspired by Direct Benefit Transfer model.
  • Reflects the principle of minimum government maximum governance.
  • Strengthens last mile delivery through technology.

Related Schemes Mentioned

  • Pradhan Mantri Garib Kalyan Anna Yojana providing 5 kg free food grains per person per month.
  • PM SVANidhi providing working capital loans to street vendors.
[2024] Consider the following statements in respect of the digital rupee: 

1. It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy. 

2. It appears as a liability on the RBI’s balance sheet. 

3. It is insured against inflation by its very design. 

4. It is freely convertible against commercial bank money and cash. 

Which of the statements given above are correct? 

(a) 1 and 2 only (b) 1 and 3 only (c) 2 and 4 only (d) 1, 2 and 4

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