Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

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Friday, 30 October 2026

Digital Rupee for Transparent Welfare – A Convergence of Views

 To: 

Shri Sanjeev Chopra - Secretary of the Department of Food and Public Distribution

[  secy-food@nic.in  ] 


Subject: Congratulations on your digital rupee article – a convergence of views


Dear Shri Chopraji,


Congratulations on your Hindustan Times article, 

Towards transparent welfare spending with digital rupee.


You have put your finger on the exact weakness of ordinary DBT: once cash leaves the government's books, nobody can tell what it was spent on. Your account of how purpose-bound CBDC tokens, Just-in-Time settlement and feature-phone wallets fix this in Chandigarh, Puducherry, Dadra & Nagar Haveli and Gujarat is the clearest I have read.


I was delighted to see this, because in October 2022, the day after RBI released

 its CBDC concept note, I had written a blog arguing for :

#   a sovereign digital rupee with a complete transaction trail, 

#   programmable end use and 

#   an offline mode for the unbanked. 


My blog below sets out where our views converge.


I hope your article helps speed up the rollout in the ten states now entering the next phase.


With regards,

Hemen Parekh

www.HemenParekh.ai / www.IndiaAGI.ai / 31 Oct 2026

Digital Rupee for Transparent Welfare – A Convergence of Views


What Shri Chopra says

In his Hindustan Times article, Shri Sanjeev Chopra explains how the Digital Rupee is fixing the blind spot in India's largest food security programme, PMGKAY, which serves over 800 million people.

  • The problem with DBT. Since 2015-16, Chandigarh, Puducherry and urban Dadra & Nagar Haveli have paid the food entitlement as cash into bank accounts. Once that cash leaves the government's books, there is no way to confirm it was used for food.

  • Programmable tokens. A CBDC token can be restricted to food grains, given a validity window, and credited only to a wallet linked to an Aadhaar-verified household.

  • A continuous audit trail. Every rupee can be traced from the Consolidated Fund of India to the point of redemption, credited in real time.

  • Reach for the poorest. Wallets work on basic feature phones through SMS and USSD.

  • The Gujarat pilot for in-kind grain. Subsidy is issued as a purpose-bound token that exists only for one transaction, and is settled with the ration-shop dealer Just-in-Time, matched to grain actually sold. Beneficiaries get an instant receipt showing their entitlement and the Centre's subsidy.

  • Savings on hardware. At full coverage, the token itself carries authentication and audit, so separate ePoS machines become redundant.

Ten more states have begun the next phase of rollout.


What I wrote in October 2022

In e-Rupee or IndiaBit: a Rose by Any Other Name? (8 Oct 2022), written the day

 after RBI released its concept note on the Central Bank Digital Currency, I

 thanked then-Governor Shri Shaktikanta Das for taking up some of my earlier

 suggestions, and urged him to consider the rest.


Those suggestions came from my June 2020 blog 

Crypto : Corruption : Corona : China:

  • A sovereign digital currency. 

  • Ban private crypto and introduce IndiaBit, a government virtual currency, still denominated in rupees.

  • All transactions digital. 

  • Over time, every purchase of goods or services moves to mobile-app digital payments.

  • A complete trail. 

  • The government would hold a full log of every transaction: who bought what, when, from whom, at what price, and where.

  • Data for policy. 

  • Automatic compilation of consumption data for the whole economy would be a game changer for policy-making.

In the same blog I highlighted three features of RBI's 2022 concept note:

  • Programmable money. 

  • CBDC could be programmed for its end use; for example, farm credit spendable only at agricultural input stores.
  • An offline mode. 

  • Payments without network or power, creating a digital footprint for the unbanked.

  • Privacy for small transactions. 

  • Trails of low-value transactions would be erased.

Where our views converge

What I argued for in 2020 and 2022 is now running on the ground, in exactly the

 shape Shri Chopra describes.

Idea

My blogs (2020, 2022)

Shri Chopra (2026)


Sovereign digital rupee instead of cash


IndiaBit: a government digital currency, still called the rupee


Digital Rupee replaces cash DBT in three UTs


Complete transaction trail


A full log of who bought what, when, from whom, at what price


A continuous, auditable trail from the Consolidated Fund to redemption


Programmable end use


Flagged RBI's example: farm credit spendable only at input stores


Tokens redeemable only for food grains, within a validity window


Reaching the unbanked


Flagged RBI's offline mode to give the unbanked a digital footprint


Wallets on basic feature phones via SMS and USSD


Data for policy and accountability


Automatic consumption data as a game changer for policy


Instant receipts and transaction-linked settlement hold ration dealers accountable


Two honest differences remain:


  1. Scope. 

  3. In 2020 I proposed going all the way: withdrawing paper currency and moving every transaction to digital. Shri Chopra's approach is narrower and wiser for now: purpose-bound tokens for welfare, with ordinary money untouched.

  5. Privacy. 

  7. A full log of every citizen's purchases raises real privacy concerns. RBI's own design answers this sensibly, with high transparency for welfare money and privacy protection for low-value retail transactions.

What Shri Chopra's article adds, which I had not foreseen, is Just-in-Time settlement. Paying the dealer only at the moment of sale, for the exact grain sold, removes the advance cash float that has always been a source of leakage.


Closing

In 2022 I asked whether we should call it e-Rupee or IndiaBit. Shri Chopra's article shows the name never mattered; the trail did. Money that can prove where it went is money that cannot quietly leak.

Congratulations, Shri Chopraji, 

for explaining so clearly what this means for 800 million PMGKAY beneficiaries. I hope the ten states now joining will move quickly.


With regards,

Hemen Parekh

www.HemenParekh.ai / www.IndiaAGI.ai / www.HemenParekh.in / 31 Oct 2026



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