India is channeling part of its welfare spending through the e-rupee, its central bank digital currency pilot. Official figures cited in the report show the country’s welfare programs manage roughly $80 billion a year, and some of that money is now being distributed through digital vouchers and wallet-based transfers intended to move funds directly to beneficiaries without intermediaries.
Welfare payouts are being restricted to approved uses
The pilot is being used in targeted subsidy programs rather than broad retail spending. Rural farmers, for example, can receive support through the e-rupee for specific needs such as drip irrigation systems, with assistance of up to 80%. These payments are redeemable only at authorized vendors, a structure meant to limit misuse and keep funds tied to the purpose for which they were issued.
Gujarat is one of the clearest examples of scale-up. Authorities there plan to bring 7.5 million households into the e-rupee system by June so they can receive subsidized food support. The push is aimed at making digital currency part of routine welfare delivery, especially for lower-income users who are more likely to interact with state benefit systems on a regular basis.
User numbers are rising, but transaction activity remains modest
Adoption has grown on paper. The number of e-rupee users climbed from about 7 million at the start of 2024 to more than 10 million recently. Still, total transaction volume remains limited. Since the e-rupee was introduced in December 2022, cumulative transactions have reached only about $3.6 billion.
That leaves the CBDC far behind India’s established payment rails. UPI, the country’s dominant digital payment network, handles about $300 billion in monthly transactions. In earlier pilot stages, some large banks boosted usage by paying employee salaries straight into digital wallets, pushing daily transaction counts above 1 million in December 2023. The report says that pace did not last, pointing to a dependence on incentives rather than steady everyday demand.
A quoted assessment in the source says the pilot has shown possible benefits of digital currency, but has not triggered a major shift so far. Most participation still appears to be driven by state-backed incentives instead of voluntary, organic use.
India is also linking the project to BRICS-level CBDC plans
The Reserve Bank of India is not limiting its ambitions to domestic payments. The report says proposals to connect CBDCs across the BRICS bloc — Brazil, Russia, India, China and South Africa — are expected to be presented at the 2026 BRICS leaders’ summit.
If such a framework moves ahead, it could reduce the role of the US dollar in trade between those economies. The article also notes the political risks around that direction. Former US President Donald Trump had warned of possible new trade sanctions if BRICS countries pursued alternatives to the dollar, and during his presidency new import tariffs were imposed on India over its purchases of Russian oil. In that context, India’s e-rupee push is being framed not only as a domestic payment reform, but also as part of a wider effort to expand its regional and international financial position.