Now Reading: 0.4% UPI fee from Oct 15, Congress calls it ‘Modi tax’
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0.4% UPI fee from Oct 15, Congress calls it ‘Modi tax’
The government will levy a 0.4% Merchant Discount Rate (MDR) on UPI person-to-merchant payments above Rs 2,000 from October 15, with a cap of Rs 300 for transactions of Rs 75,000 and…
The government will levy a 0.4% Merchant Discount Rate (MDR) on UPI person-to-merchant payments above Rs 2,000 from October 15, with a cap of Rs 300 for transactions of Rs 75,000 and above. The National Payments Corporation of India said over 95% of merchant transactions by volume are below Rs 2,000 and remain free. The Reserve Bank of India endorsed the move as necessary for the digital payments ecosystem's long-term sustainability.
The Congress dubbed the fee a 'Modi tax', with Rahul Gandhi alleging Prime Minister Modi had surrendered to US payment companies. Congress chief Mallikarjun Kharge said the fee amounted to a 'Digital Payments Tax'. The BJP hit back, calling the Congress a 'shop of lies', noting that 96% of merchant transactions are charge-free and that small vendors receiving up to Rs 1 lakh a month via UPI QR codes are exempt.
Indian Opinion Analysis
Pro-government sources led with RBI and NPCI statements framing the MDR as a sustainability measure, while omitting the political backlash. Government-critical sources led with Rahul Gandhi's allegation that the fee would be passed to consumers and his claim of surrender to US pressure. Both framings are valid on their own terms but the government-critical side overstates consumer impact: the fee applies only to about 4% of merchant transactions, not to consumers directly. The pro-government side understates the political cost: the Opposition has a credible argument that merchants will pass costs on. The actual consumer effect depends on how merchants adjust pricing, a question only market behaviour will answer.
The finance ministry will finalise implementation guidelines by October 1. The fund for small-merchant UPI adoption, fed by 5% of MDR collected, is a concrete item to track.
Coverage: 9 sources, 1 pro-government, 2 government-critical, 5 neutral, 1 sensationalist
Sources (9): hindustantimes.com (government critical), nationalheraldindia.com (government critical), deccanchronicle.com (sensationalist), thehindubusinessline.com (neutral report), thehindubusinessline.com (2) (neutral report), livemint.com (neutral report), rediff.com (pro government), rediff.com (2) (neutral report), thefederal.com (neutral report)
This brief was synthesised by AI from the 9 sources linked above, so one read covers every framing they carry.
Updated: this story now draws on 9 sources.
