UPI blames row: Govt vs Rahul Gandhi as Cong MPs’ panel stall triggers war of words; Gogoi, Tewari reply | Today’s news

The Union government has questioned the rationale behind Congress leader Rahul Gandhi’s criticism of the decision to levy UPI payments to merchants higher. ₹2,000, saying that the parliamentary standing committee supported the move and that members of the Congress panel supported it.

A senior government official, quoted by news agency PTI, said that the Parliamentary Standing Committee on Finance had urged for a graduated trade discount rate (MDR)/revenue framework for the Unified Payments Interface (UPI) and noted that it should be notified and made operational without delay.

Read also | New UPI rules from October 15: Will Netflix, phone bills via AutoPay cost more?

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.

Quick answers to key questions

•5 QUESTIONS

Starting October 15, merchant-to-merchant transactions above ₹2,000 will be charged a fee of 0.4% with a maximum limit of ₹300, while transactions up to ₹2,000 will remain free.

The fee aims to create a sustainable revenue model for the UPI ecosystem, which has been underfunded, and ensure that investments in security and infrastructure can continue without relying too heavily on government subsidies.

While small traders will continue to be exempt from fees, there may still be knock-on effects as the new fee structure could affect pricing strategies and cost structures in the wider market.

Layered MDR enables higher value transactions to be charged, helping to fund the UPI system while ensuring that small and low value transactions remain cost-free, thus balancing revenue needs and user accessibility.

Merchants may face challenges as the new charges could lead to price adjustments for consumers, although they cannot directly pass on the charges, so it is important for them to monitor customer reactions to these changes.

“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.

What did Rahul Gandhi say?

In response to the above government’s decision to levy a fee on UPI payments ₹2,000 to traders, Gandhi alleged that 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 reiterated its earlier recommendation and emphasized 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 by the staggering disparity between them ₹allocation of 2,000 million crowns and the estimated operating costs of the industry ₹20,700 million crowns.

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.

Read also | Paytm’s unexpected UPI faces reality check from MDR sharing, competition

Regarding the incentive scheme for promotion of RuPay debit cards and low value (person-merchant) BHIM-UPI transactions, the committee in its report further noted and recommended, “The committee notes the massive ₹2000 crore budgetary allocation for 2026-27 designed to offset the ecosystem costs of zero MDR policy on low value RuPay and UPI transactions.

“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 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.

Tewari responded by calling it unfortunate that the proceedings of parliamentary standing committees, which are supposed to be privileged, are being used by the government to score brownie points.

Tewari, Gogoi answers

Tewari, a former Union minister, said the claim that certain measures were supported by “certain members” of the committee was an inaccurate and misleading characterization of the parliamentary committee’s confidential deliberations.

“My colleague Gaurav Gogoi is right, no specific proposal like the recent merchant discount rate -MDR to be imposed on UPI transactions from 15th October 2026 was ever brought before the Parliament position on finance rate, quantity, amount of fee charged, cap and exemptions etc (sic).”

Read also | New UPI rules from October 15: Will Netflix, phone bills via AutoPay cost more?

“Even on the principle or conceptual basis of MDR like my colleague Gaurav Gogoi it points out the concerns expressed by members regarding its need, effectiveness etc. during various committee meetings,” Tewari said.

Even on the principle or conceptual basis of the MDR… members raised concerns.

Earlier, Gogoi also referred to the meeting and said that questions were raised regarding the need for MDR. According to him, however, government representatives did not have any concrete or satisfactory answers at that time.

“I repeat that the recent UPI tax policy is hurting small Indian traders, vendors, entrepreneurs and helping big US corporations,” Gogoi wrote on X.