Modi government’s loot has reached UPI, says Congress; BJP hits back

The new framework, effective October 15, will leave person-to-person transfers and payments up to ₹2,000 free, while merchants bear the charge.

The Congress on Tuesday accused the government of breaking its own promise of keeping the United Payment Interface free of fees after a notification issued the day before paved the way for a Merchant Discount Rate charge on UPI transactions above ₹2,000.

Rahul Gandhi, Kharge attack move as UPI policy shift

Congress MP Rahul Gandhi. (PTI)

Leader of Opposition in the Lok Sabha Rahul Gandhi said the move breaks the government’s promise of a free UPI system and accused it of “surrendering to American pressure” on digital payments. “The Modi government’s loot has now reached UPI,” Congress chief Mallikarjun Kharge said in a statement. “‘No fees on UPI’ has been changed to ‘no fees on UPI transactions up to ₹2,000.’”

On Tuesday evening, the government introduced a 0.4% transaction fee on payments above ₹2,000, capped at ₹300 for payments of ₹75,000 and above, from October 15, while explicitly ring-fencing everyday person-to-person transfers from any charge.

Reacting to the Congress statements, the BJP accused the party of spreading “fake news” to create panic about UPI transaction charges and derail Digital India. BJP spokesperson Pradeep Bhandari called the opposition party a “jhooth ki dukaan (shop of lies)” and said the government has made it absolutely clear that MDR charges will not be levied on transactions between individuals. He said 96 per cent of UPI merchant (P2M) transactions are ₹2,000 or below, and they are 100 per cent charge-free. “Even if these transactions account for just 5% of the volume, they make up nearly 65% of UPI’s total transaction value,” Gandhi said in a post in Hindi on X. He argued that even if customers are not billed directly, the cost will still reach them. “The government says no fees will be charged to customers. But where will the fees imposed on shopkeepers ultimately come from? Added to prices, straight out of the customer’s pocket.” Gandhi also linked the decision to trade negotiations with Washington, arguing that the US has pushed against India’s zero-MDR policy for years.

Kharge calls proposed charge a burden on consumers

Kharge, in a post, alleged that sky-high inflation has already emptied the common person’s pocket. “Wholesale inflation is near 10%, and the BJP government has planned to impose a ‘Digital Payments Tax’ on the public, aiming to destroy whatever little savings they have left,” he said on X.

Congress general secretary in-charge communications Jairam Ramesh said the sequence of events that led to announcement of the MDR was “another example of Modi Govt’s FAST moves (First Announce, Subsequently Think).”

Congress’s media and publicity department head Pawan Khera said the 0.4 per cent MDR on UPI transactions above ₹2,000 should be called the “Modi Tax”.