Govt official disputes Rahul’s criticism of UPI allegations, says Congress MPs on panel nodded

LoP in Lok Sabha Rahul Gandhi. File | Photo credit: PTI

The government on Wednesday (September 16, 2026) questioned the rationale behind Congress leader Rahul Gandhi’s criticism of the decision to levy a fee on UPI payments to merchants above ₹2,000, saying a parliamentary standing committee had supported such a move and members of the Congress panel supported it.

A senior government official said that the Parliamentary Standing Committee on Finance has been pushing for a Merchant Graded Rate (MDR) / revenue framework for the Unified Payments Interface (UPI) and noted that it should be notified and made operational without delay.

Also read | Opposition MPs raise concerns over proposed UPI merchant payment fee

Five Congress MPs including P Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K Gopinath were present on August 12 when the report was adopted, with no dissent recorded in the published minutes, the official said.

“Why is Rahul Gandhi opposing something that his own MPs, including former finance minister P Chidambaram and former minister in the UPA government Manish Tewari, are supporting in a parliamentary panel,” asked the functionary.

Reacting to the government’s decision to levy a fee on UPI payments above ₹2,000 to merchants, Mr Gandhi said Prime Minister Narendra Modi had decided to “bow down” to US President Donald Trump and give America a huge amount of money.

The Leader of the Opposition in the Lok Sabha also demanded a reversal of the government’s decision to levy a fee on UPI payments.

According to the report of the standing committee headed by BJP MP Bhartruhari Mahtab, the panel took note of its earlier recommendation stressing that legislative provisions for a tiered MDR structure were brought forward in view of the imperative of a viable revenue model.

However, the committee remained deeply concerned about the staggering discrepancy between the allocation of ₹2,000 crore and the estimated operating cost of the industry of ₹20,700 crore.

In the committee’s view, while there is now a legal option to allow calibrated MDR for high-value transactions, any delay in notifying and operationalizing this framework leaves payment service providers heavily dependent on disproportionate subsidies, jeopardizing critical investments in cyber security, fraud prevention and network infrastructure.

Regarding the Incentive Scheme for Promotion of RuPay Debit Cards and BHIM-UPI Low Value (Person-Merchant) Transactions, the Committee in its report further noted and recommended, “The Committee notes the massive budgetary allocation of ₹ 2,000 crore for 2026-27 designed to offset the ecosystem costs of zero value UPI transactions and the RuPay MDR policy.

“The committee notes that while UPI is expected to process up to 150 billion transactions per month and add 600 million new users, the current government incentive covers only 11 percent of actual industry costs and 14 percent of potential MDR collections, creating a structural funding gap affecting long-term infrastructure investment.” The committee recommended that while the proposed three-year multi-year scheme and cashback components are necessary to democratize digital payments in hitherto untapped tier 3-6 cities, the FSA must simultaneously explore a separate, tiered revenue model.

The committee would like to emphasize that creating a viable revenue mechanism is essential to ensure that the UPI ecosystem achieves financial sustainability without continuously burdening the exchequer, it said.

Published – 17 Sep 2026 06:24 IST