Now Reading: UPI faces Rs 20,700 crore funding gap, says panel
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UPI faces Rs 20,700 crore funding gap, says panel
A parliamentary committee has flagged a massive funding gap for the UPI ecosystem: operational costs are estimated at Rs 20,700 crore, against a government allocation of just Rs 2,000 crore. The panel,…
The Story in Brief
A parliamentary committee has flagged a massive funding gap for the UPI ecosystem: operational costs are estimated at Rs 20,700 crore, against a government allocation of just Rs 2,000 crore. The panel, led by Bhartruhari Mahtab, recommended a self-reliant, tiered revenue model and noted that recent amendments to the Payment and Settlement Systems Act now allow transaction charges on digital payments.
The finance ministry has clarified that any future merchant discount rate (MDR) will be nominal and apply only to high-value merchant transactions above a threshold. Consumer payments will remain free. The committee warned that delay in operationalising such charges threatens investments in cybersecurity and fraud prevention.
The Indian Opinion
Both sides of the UPI debate are pushing lazy extremes. Those insisting UPI must stay free forever ignore the Rs 18,700 crore gap that banks and payment firms must somehow cover, subsidies are not magic money. Meanwhile, supporters of MDR often forget that UPI’s zero-cost model is why small merchants and millions adopted it. The real test is the specific threshold the government sets: will it be high enough to protect small kirana stores while letting big businesses share the cost?
Source: economictimes.indiatimes.com
This story was synthesised by AI from the source linked above.
