Gujarat Launches e-Rupee for PDS

- The e-Rupee in this pilot is a "programmable" digital currency, meaning the digital coupons issued by the Reserve Bank of India can only be redeemed for a specific purpose—in this case, foodgrains at fair price shops. This feature is designed to reduce leakage and ensure the subsidy is used as intended. - This initiative aims to address operational challenges of the existing PDS, such as failures in biometric authentication and issues with electronic Point-of-Sale (e-POS) machines, by providing a secure and traceable alternative. - The "Annapurti" grain ATM, developed in partnership with the UN World Food Programme, can dispense up to 50 kg of grain in five minutes and is designed to reduce waiting times by 70%. It authenticates users via their ration card or Aadhaar-linked biometrics. - Unlike UPI, which is a payment system for transferring money between bank accounts, the e-Rupee is a Central Bank Digital Currency (CBDC) that functions as a digital equivalent of physical cash. It is stored in a digital wallet and doesn't require a bank account for use. - The pilot project was launched in select districts of Gujarat, including Ahmedabad, Anand, Valsad, and Surat. There are plans to expand the initiative to the Union Territories of Chandigarh, Puducherry, and Dadra and Nagar Haveli and Daman and Diu. - India's retail e-Rupee pilot (e₹-R) was first launched in December 2022 to test a digital version of cash for the public. As of March 2025, the retail pilot had expanded to 17 banks and over 6 million users. - The Gujarat government submitted a concept note to the central government for a cashless PDS model using CBDC or digital food coupons to enhance transparency and minimize manual intervention. However, this has faced opposition from the All India Fair Price Shop Dealers' Federation. - India's Public Distribution System is one of the largest in the world, serving over 800 million beneficiaries through a network of more than 500,000 fair price shops.