New Delhi, Sept. 17 -- Congress MPs on the Parliamentary Standing Committee on Finance have rejected claims that they backed the government's decision to introduce a Merchant Discount Rate (MDR) on certain UPI transactions above Rs.2,000.
The clarification came after a government functionary said the parliamentary panel had recommended a tiered MDR or revenue framework for UPI and that five Congress MPs, including P Chidambaram, Manish Tewari and Gaurav Gogoi, were present when the report was adopted without any recorded dissent. Gogoi, however, said the specific proposal to levy a fee on UPI transactions was not discussed before the committee. He said the Department of Financial Services did not present any specific UPI tax proposal when it interacted with members of the panel.
According to Gogoi, committee members had raised questions about the need for an MDR framework, but government representatives did not provide specific or satisfactory answers at that stage. Manish Tewari also disputed the government's interpretation of the committee proceedings. He criticised what he described as an attempt to use the proceedings of parliamentary standing committees in the political debate over the UPI charges. The dispute follows the government's announcement that a 0.4% MDR will be imposed from October 15 on specified person-to-merchant UPI transactions above Rs.2,000. The government has maintained that the charge is not a tax on consumers and that person-to-person payments will remain free.
The government has cited the parliamentary committee's earlier recommendations on creating a sustainable revenue model for the UPI ecosystem. Reports on the committee's August proceedings said it had called for a tiered MDR or revenue framework and suggested that it be operationalised. The disagreement centres on the distinction between the committee's recommendation for a broader and sustainable revenue framework and the government's subsequent decision to introduce a specific 0.4% MDR on selected transactions above Rs.2,000. Congress leaders have separately criticised the new UPI fee structure and questioned the government's decision to introduce charges after years of promoting UPI as a low-cost digital payment system. The government has defended the measure as necessary to support the financial sustainability of the payments ecosystem.
The issue has now become a political dispute over both the new UPI fee and the interpretation of the parliamentary panel's recommendations. While government sources have pointed to the panel's recommendation and absence of recorded dissent, Congress MPs have said that the specific MDR proposal announced by the government was not discussed or approved by them.
Published by HT Digital Content Services with permission from Millennium Post.