PTI
New Delhi
The Opposition on Wednesday stepped up its attack on the government over UPI transaction charges, demanding an immediate rollback, even as the government made it clear there was no question of reversing the decision.
Ending nearly six years of fully free UPI payments, the government had on Tuesday introduced a 0.4% fee on transfers worth more than Rs 2,000 made to merchants through the platform from October 15, while ring-fencing person-to-person transactions as well as small payments from any charge.
The Finance Ministry clarified on Wednesday that there was no foreign influence behind the decision to impose a 0.4% MDR (Merchant Discount Rate) on UPI transactions above Rs 2,000.
“Some claims suggest the change is due to foreign influence. This is false. 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.
Leader of Opposition in the Lok Sabha Rahul Gandhi accused Prime Minister Narendra Modi of trying to please US President Donald Trump by imposing
the charge.
A top functionary, when asked whether the government was considering to rollback the move, said a considered decision had been taken and there was no question of reversing it.
Sources said the decision to impose MDR charges was taken in the larger interest of the UPI ecosystem and to strengthen its safety and security.
The decision to levy charges, as prevalent in other countries, was taken at the time of introduction of the UPI system, sources said, adding that the new MDR framework would make the platform self-sustainable.
The decision evoked strong opposition from several quarters, including traders, shopkeepers and political parties who dubbed the move as ‘Modi Tax’. Traders’ associations said they would push for cash payments to avoid additional costs on digital payments.
Earlier, Parliament’s Standing Committee on Finance, in its 32nd report, warned that the zero-MDR regime “puts pressure on government finances” and limits the ecosystem’s ability to invest in long-term infrastructure. It had also urged that “establishing a viable revenue mechanism is critical to ensuring the UPI ecosystem achieves financial sustainability without perpetually straining the government exchequer”.
The latest move signalled the end of an era for the world’s largest real-time payments system even as the government tried to avoid alarming the hundreds of millions of daily users.
