Union Finance Minister Nirmala Sitharaman stated on Wednesday that India’s digital payments system has achieved global recognition. Her remarks come during a political controversy surrounding the Centre’s recent decision to impose fees on certain UPI transactions. This move has sparked debate among stakeholders and users alike, raising concerns over the accessibility and affordability of digital payments in the country.
Sitharaman Highlights India’s Digital Payment Success
During the Eighth International Tax Conference in Bengaluru, Finance Minister Nirmala Sitharaman praised India’s digital payment system, stating, “As much as the digital is a success, you see the numbers of NPCI (National Payments Corporation of India), it’s an envy of the world.” This remark underscores the global recognition of India’s advancements in digital finance.
Her remarks came a day after the government faced opposition over the new UPI fee framework. The Congress described the move as a step towards imposing a UPI fee. The comments formed part of a broader argument from Sitharaman that tax and economic policy should take account of how changes affect investment and economic activity. TDS and TCS provisions had been rationalised, thresholds raised and some criminal consequences removed. But it was the digital economy that brought her back to the question of how taxation can affect future investment.
The changes allow a 0.4% Merchant Discount Rate on merchant transactions above ₹ 2,000, while smaller transactions and person-to-person payments remain outside the charge.
The government has said the framework is intended to support the financial sustainability of the payment system. She said some high street shops continued to prefer cash despite the expansion of digital payment infrastructure. “A mature tax policy debate must go beyond sectoral considerations”. Sitharaman said the government’s approach to taxation had been aimed at making compliance easier. “The philosophy is simple: make voluntary compliance easier and reserve enforcement capacity for cases that genuinely require it”. Sitharaman said digital companies, virtual digital assets, cloud services and cross border transactions required careful examination.
