What is a CBDC (and is the digital rupee different)?
A digital rupee is not a digital rupee in your bank account. It is a claim on the central bank itself.
Cash is a claim on the central bank. A bank balance is a claim on your bank. A CBDC is the first one, in digital form.
Who owes you, and why that is the whole answer
Cash in your hand is issued by the central bank. If your bank fails, the note in your pocket is unaffected, because the note is not your bank's promise.
The balance in your account is different. It is a liability of your bank. Deposit insurance exists precisely because that distinction is real and occasionally becomes very real.
A CBDC takes the property of cash, a direct claim on the central bank, and gives it a digital form. That is the entire innovation. Everything else people say about CBDCs is a consequence of this one change.
Retail and wholesale, which are barely the same project
Retail CBDC is for people and shops. India's digital rupee pilot uses a token model held in a wallet, deliberately designed to feel like cash, including offline transfer.
Wholesale CBDC is for banks settling with each other, and it is the less discussed and probably more consequential half. Settling securities and interbank obligations in central bank money, instantly, removes an entire category of risk that currently requires elaborate machinery to manage.
The question India has to answer
This is the honest tension, and it is specific to India. UPI already delivers instant, free, ubiquitous retail payments. A citizen using UPI experiences almost everything a retail CBDC promises.
So the retail case has to rest on something UPI does not provide: genuine offline capability, cash-like privacy characteristics, or programmability. Whether those justify a parallel system is a live question and reasonable people disagree.
Programmability is where the argument becomes genuinely uncomfortable. Money that can carry conditions can also carry restrictions, and the same feature that permits a targeted subsidy that cannot be misspent permits things people would object to strongly. That debate is a policy debate, not a technical one.
Cash is a note signed by the central bank. A bank balance is a note signed by your bank promising to give you the first note. A CBDC is the central bank's signature, in a form you can send.
Where you meet it
Not yet, for most people. Which is itself the honest answer, and worth saying plainly rather than pretending otherwise.