UPSC Prelims Practice Questions — Union Home Minister and Minister of Cooperation Shri Amit Shah launches the Central Bank Digital Currency (CBDC)-based Public Distribution System (PDS) in Gandhinagar, the capital of Gujarat

Q1. The Reserve Bank of India's very first pilot in the Wholesale Digital Rupee (e₹-W) segment, commenced in November 2022, was designed primarily for which one of the following use cases?

  • A. Settlement of secondary market transactions in government securities
  • B. Interbank call money market transactions
  • C. Cross-border retail remittance settlement
  • D. Direct Benefit Transfer of food subsidy at Fair Price Shops

Q2. In the context of the Digital Rupee (e₹), the term 'programmability' is most precisely defined as which one of the following?

  • A. The ability to restrict e₹ funds for a specific designated purpose using parameters such as expiry date, geography or merchant category
  • B. The automatic conversion of e₹ into bank deposits earning a floating rate of interest
  • C. The capacity of e₹ to be mined by users through distributed computing
  • D. The ability of the holder to write and deploy independent smart-contract tokens on a public blockchain

Q3. With reference to the announced next-phase expansion of the CBDC-based food subsidy/PDS pilot, which of the following Union Territories is/are correctly identified as being slated for the rollout?

  1. Puducherry
  2. Chandigarh
  3. Lakshadweep
  4. Dadra & Nagar Haveli and Daman & Diu
  • A. 1 and 2 only
  • B. 1, 2 and 4
  • C. 2, 3 and 4
  • D. 1, 3 and 4

Q4. The legal entitlement of 5 kg of foodgrains per person per month to Priority Households, delivered through Fair Price Shops, is a statutory guarantee under which one of the following?

  • A. The National Food Security Act, 2013
  • B. The Pradhan Mantri Garib Kalyan Anna Yojana
  • C. The Essential Commodities Act, 1955
  • D. The Food Corporations Act, 1964

Q5. With reference to the National Food Security Act, 2013, consider the following statements. Which of the above is/are NOT correct?

  1. It aims to cover up to 75% of the rural and up to 50% of the urban population.
  2. Antyodaya Anna Yojana households are entitled to 35 kg of foodgrains per household per month.
  3. It provides for distribution of only foodgrains—rice, wheat and coarse grains—through the Targeted Public Distribution System.
  4. It mandates that every beneficiary must be authenticated exclusively through Aadhaar biometric at Fair Price Shops, with no alternative permitted.
  • A. 1 only
  • B. 3 only
  • C. 4 only
  • D. 2 and 4

Q6. The Direct Benefit Transfer (DBT) Mission, which serves as the nodal point for implementing DBT programmes across welfare schemes, currently functions under which one of the following?

  • A. The Cabinet Secretariat
  • B. The Department of Expenditure, Ministry of Finance
  • C. NITI Aayog
  • D. The Ministry of Electronics and Information Technology

Q7. As reported in 2025, the number of accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY)—the 'Jan Dhan' pillar of the JAM trinity underpinning DBT—had crossed approximately how many?

  • A. 34 crore
  • B. 44 crore
  • C. 54 crore
  • D. 64 crore

Q8. Which one of the following is the nodal central agency responsible for the procurement, storage, movement and distribution of foodgrains that flow into the Public Distribution System?

  • A. Food Corporation of India (FCI)
  • B. National Agricultural Cooperative Marketing Federation (NAFED)
  • C. Central Warehousing Corporation (CWC)
  • D. State Civil Supplies Corporations

Q9. At the Union level, the CBDC-based PDS is administered by the Department of Food and Public Distribution, which falls under which one of the following Ministries?

  • A. Ministry of Consumer Affairs, Food and Public Distribution
  • B. Ministry of Agriculture and Farmers Welfare
  • C. Ministry of Rural Development
  • D. Ministry of Cooperation

Q10. With reference to the Puducherry CBDC-based food subsidy pilot as compared with the earlier Gujarat pilot and with regular NFSA distribution, consider the following statements. Which of the statements given above is/are correct?

  1. The Puducherry pilot is implemented as a Direct Benefit Transfer use case under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY).
  2. Like the Gujarat pilot, it uses programmable Digital Rupee (e₹) tokens redeemable only for entitled foodgrains at Fair Price Shops.
  3. PMGKAY, unlike the original subsidised NFSA distribution, provides its foodgrains to eligible beneficiaries free of cost.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q11. Consider the following statements distinguishing the Digital Rupee (e₹) from UPI and private cryptocurrencies. Which of the above is/are NOT correct?

  1. The e₹ is legal tender issued by the Reserve Bank of India.
  2. Unlike UPI, which is a payment system, the e₹ is itself currency and a store of value.
  3. The e₹ carries the sovereign guarantee of the RBI, unlike private cryptocurrencies.
  4. Like private cryptocurrencies, the e₹ is always issued on a fully decentralised, permissionless public blockchain outside the control of any central authority.
  • A. 1 only
  • B. 4 only
  • C. 3 and 4
  • D. 2 only