The Union finance ministry clarified on Wednesday that the decision to impose a 0.4% Merchant Discount Rate (MDR) on UPI transactions exceeding ₹ 2,000 was not influenced by foreign entities. This statement comes amid growing political controversy surrounding the new fee structure, which has sparked debate among various stakeholders.
HT learnt that the changes to the UPI regime were also mentioned in the Cabinet meeting on Wednesday. HT learnt on Wednesday, after defence minister Rajnath Singh briefed the Cabinet about the recently concluded Brics summit, Union commerce minister Piyush Goyal touched upon the UPI issue, saying that it was important for structural reasons, and for improving public infrastructure. This is false. In an explainer, the finance ministry reiterated that UPI remained free for consumers. “UPI continues to be free for customers. Say one thing in Parliament, then do another outside. It’s a pattern. NITI Aayog vice-chairman Ashok Kumar Lahiri defended the changes. “Costs are incurred in UPI; who will pay that? This is the user pay principle…This is not NITI Aayog’s official position but my personal view that users should pay up in all business transactions. Please do not think that the government would provide grants or subsidies for everything. How will the business run otherwise? Every day they are giving punishment to the people of this country. Every day, common people are in great distress”.
“Some claims suggest the change is due to foreign influence. The controversy broke out after the finance ministry on Tuesday announced that a 0.4% MDR will apply to person-to-merchant (P2M) UPI transactions above ₹ 2,000, while person-to-person (P2P) transactions will remain free irrespective of their value. For transactions of ₹ 75,000 and above, the MDR will be capped at ₹ 300 per transaction, the ministry said in a statement.
The clarification came in response to allegations by Congress leader Rahul Gandhi and other opposition leaders who said that the government succumbed to US pressure in making the decision. India’s UPI policy decisions are made independently, with the clear goal of building a self-sustaining, inclusive, and affordable digital payments ecosystem,” the finance ministry said in a post on X. Sending money to friends, paying at shops, or scanning a QR code — all remain without charges,” the ministry said, and pointed out that no charges were levied on P2P transfers. Trinamool Congress Rajya Sabha floor leader Derek O’Brien said “Nothing new. Take less, take from business and take only that much which results in growth,” he said. Congress general secretary KC Venugopal called it a “New Modi Tax” and alleged that it was announced “because of the surrendering attitude of PM Modi to the US.
