Congress denies its MPs backed new UPI charge in parliamentary panel

A sharp political row has broken out in India over a new fee on UPI transactions, with the ruling Bharatiya Janata Party (BJP) claiming opposition MPs quietly approved the charge before publicly campaigning against it.

The dispute centres on a new 0.4 per cent merchant discount rate (MDR) on UPI merchant payments above ₹2,000, scheduled to take effect on 15 October. While person-to-person transfers and smaller purchases will remain free, the opposition Congress party has branded the levy a "UPI tax" and demanded its immediate withdrawal.

Why is the BJP blaming Congress?

Seeking to blunt the opposition's attack, BJP sources pointed to a parliamentary report from the Standing Committee on Finance, which was adopted on 12 August. The panel, chaired by BJP MP Bhartruhari Mahtab, recommended introducing a tiered revenue model to keep the UPI payment network financially viable.

BJP officials noted that five Congress MPs—including former finance minister P. Chidambaram and senior leaders Manish Tewari and Gaurav Gogoi—were members of the committee and present when the report was approved. Because the published minutes record no formal dissent, the ruling party argues that the opposition effectively signed off on the framework.

How has Congress responded?

The Congress MPs named in the report have hit back, accusing the government of misrepresenting private committee discussions to score political points.

Gaurav Gogoi said the finance ministry never presented a concrete proposal for a UPI fee during their meetings. "The Department of Finance did not have any specific proposal on UPI tax when they met the members," Gogoi said, adding that government representatives failed to provide satisfactory answers when committee members questioned the conceptual need for a levy.

Manish Tewari backed his colleague, stating that the committee was never shown any specific details about the rates, transaction ceilings, or exemptions now being introduced. He accused government officials of leaking committee proceedings to "score brownie points" rather than defending their own policy.

What did the parliamentary report actually say?

In its report, the committee warned of a major funding crisis in the digital payments ecosystem. While the government allocated ₹2,000 crore to support the network, the industry estimates its actual operating costs are closer to ₹20,700 crore.

The panel warned that relying on small government subsidies instead of a proper revenue model could starve the network of critical funding for cybersecurity, fraud prevention, and database infrastructure. It concluded that a viable revenue mechanism is essential to make UPI sustainable without "perpetually straining" the government exchequer.

What happens next?

The government has ruled out any rollback of the fee. Officials insist the levy is not a tax and that the money will not go to the treasury, but will instead be shared among banks and payment app providers to support and expand the UPI ecosystem. Person-to-person payments and automated recurring bills, such as utility payments and mutual fund instalments, will remain exempt from the charge.