3 hrs ago
Congress Disputes Committee Support for Proposed UPI Merchant Fees
India is arguing about whether some large UPI payments to shops should have a fee.
The reported fee is 0.4 per cent for certain payments above Rs 2,000.
Government representatives said a parliamentary committee supported creating a tiered fee system.
Congress MPs Gaurav Gogoi and Manish Tewari said the committee never saw the specific proposal, including its rate, limits or exemptions.
They also said committee members had questioned whether MDR was needed and whether it would work.
The government pointed to a committee report and the absence of recorded dissent when it was adopted.
The report said payment companies face much higher costs than the government funding currently provided.
Congress wants the fee withdrawn, while the government says a revenue system is needed to support digital-payment infrastructure.
Congress MPs Gaurav Gogoi and Manish Tewari said the finance committee never discussed the specific UPI MDR proposal.
The proposal involves a reported 0.4 per cent fee on certain merchant UPI payments above Rs 2,000.
A government functionary said the committee supported a tiered MDR or revenue framework and urged its prompt implementation.
Five Congress MPs were present when the committee report was adopted on August 12, with no dissent recorded in published minutes.
The committee report cited Rs 2,000 crore in funding against estimated industry costs of Rs 20,700 crore.
- Who
- The Government of India, Congress MPs including Gaurav Gogoi and Manish Tewari, Rahul Gandhi, and the Parliament Standing Committee on Finance.
- What
- A political dispute over a reported 0.4 per cent Merchant Discount Rate on certain UPI merchant payments above Rs 2,000.
- Where
- India, in the context of Parliament and national digital-payment policy.
- When
- The dispute was reported on Thursday; the committee report was adopted on August 12, and Manish Tewari referred to implementation from October 15, 2026.
- Why
- The government cited a funding gap and the need for a viable revenue model for payment providers, while Congress opposed the fee and disputed claims that its MPs supported the specific proposal.
Congress and Fee Critics
Government and Committee Rationale
Whether Congress MPs supported the proposal
Congress and Fee Critics
Gaurav Gogoi and Manish Tewari said the specific MDR proposal was never presented to or endorsed by the finance committee, and that committee proceedings were confidential.
Government and Committee Rationale
A government functionary said the committee supported a tiered MDR or revenue framework; the government also cited the presence of five Congress MPs when the report was adopted and the absence of recorded dissent.
Need for MDR
Congress and Fee Critics
Congress MPs said members questioned the need and effectiveness of MDR and argued that the policy would hurt small Indian merchants, vendors and entrepreneurs.
Government and Committee Rationale
The committee report said payment providers faced a major gap between available funding and operational costs, threatening investment in cybersecurity, fraud prevention and network infrastructure.
Political response
Congress and Fee Critics
Congress accused the Modi government of diverting attention from public backlash and Rahul Gandhi demanded that the fee decision be rolled back.
Government and Committee Rationale
The government questioned Rahul Gandhi's opposition to a measure it said members of his party had supported within the parliamentary panel.
Key facts
- Reported fee
- A 0.4 per cent MDR was reported for certain UPI payments to merchants above Rs 2,000.
- Congress's claim
- Gaurav Gogoi and Manish Tewari said the committee was not shown the specific proposal's rate, fee amount, ceiling or exemption slabs.
- Government's claim
- A government functionary said the finance committee backed a tiered MDR or revenue framework and called for it to be operationalised without delay.
- Committee attendance
- Five Congress MPs were present when the report was adopted on August 12, and published minutes recorded no dissent.
- Budget allocation
- The committee report cited a Rs 2,000 crore allocation for 2026-27 to offset ecosystem costs linked to zero-MDR RuPay and low-value UPI transactions.
- Estimated industry cost
- The report cited estimated payment-industry operational costs of Rs 20,700 crore.
- Funding gap
- The report said the incentive scheme covered 11 per cent of actual industry costs and 14 per cent of potential MDR collections.
Quotes
Jairam Ramesh
Congress general secretary in charge of communications
“The Parliament Standing Committee on Finance has not discussed the UPI tax proposal that the Modi government has recently announced. The Department of Finance did not have any specific proposal on UPI tax when they met the members of the Finance Committee.”
thehansindia.com
“I reiterate that the recent UPI tax policies hurt the small Indian merchants, vendors, entrepreneurs and help the major American corporations. Roll back UPI tax. Stop surrendering, PM Modi.”
rediff.com
thehansindia.com
Sources
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