The Bangaru Vaickal Neeradhara Koottamaippu, a water users and farmers’ collective has urged the Puducherry government to scrap the Central Bank Digital Currency (CBDC)-based food subsidy distribution programme in the Union Territory.

In a letter addressed to Lieutenant Governor K. Kailashnathan, the president of the collective, V. Chandrasekhar, said the Department of Civil Supplies and Consumer Affairs has announced the implementation of the scheme for ration cardholders, replacing direct cash transfers with digital wallets.

The project, meant to cover beneficiaries under the Pradhan Mantri Garib Kalyan Anna Yojana, envisages utilisation of the Reserve Bank of India’s e-rupee for subsidy distribution. Under the programme, food subsidy would be credited to identified beneficiaries in the form of programmable CBDC tokens directly into their wallets.

Special camps to create these digital wallets have been scheduled in Bahour and Ariyankuppam and this announcement has caused widespread shock and anxiety among the local residents and farmers.

Mr. Chandrasekhar said that replacing of ration commodities with cash or digital currency will eventually eliminate ration shops altogether, undermining the core purpose of the public distribution system in alleviating hunger among the poor.

“The scheme will force people, who rely on the government for essentials, to fall into the clutches of private markets with hiked prices. Without ration shops, the government’s direct procurement of food grains from farmers will also cease, affecting their livelihoods,” he said.

The Lt. Governor should immediately intervene and scrap the scheme as it threatens food security, he said.