Congress MPs react to ‘no dissent’ report on MDR, say no proposal was ever brought before panel | India News
NEW DELHI: Congress on Thursday refuted the Centre’s claim that five of its members supported the government’s decision to introduce a merchant discount rate of 0.4% on UPI payments above Rs 2,000, saying that no such discussion took place during the Parliamentary Standing Committee meeting.In a social media post on X, Congress MP Gaurav Gogoi said that the department of finance did not have any specific proposal on UPI tax when it met members of the finance committee.“The Parliament standing committee on finance has not discussed the UPI tax proposal that the Modi government has recently announced,” Gogoi said.“The department of finance did not have any specific proposal on UPI tax when they met the members of the finance committee. Questions were raised on the need for MDR but the representatives of the government did not have any specific or satisfactory answers at that point,” he added.He reiterated the party’s demand to roll back MDR on UPI and said, “I reiterate that the recent UPI tax policies hurt the small Indian merchants, vendors, entrepreneurs and help the major American corporations. Roll back UPI tax. Stop surrendering, PM Modi.”Another Congress MP, Manish Tewari, backed Gogoi and accused the Centre of using the privileged proceedings of the Parliamentary Standing Committee to “score brownie points.”“It is unfortunate that proceedings of Parliamentary Standing Committees that are supposed to be privileged are now sought to be used by the government to score brownie points,” Tewari said in a social media post.“My colleague is correct; no specific proposal qua the recent Merchant Discount Rate – MDR to be levied on UPI transactions from October 15th, 2026, was ever brought before the Parliamentary standing committee of Finance – rate, quantum, amount of fee to be charged, ceiling and exemption slabs, etc.,” he added.He also said that concerns were raised by the Opposition over the need and efficacy of MDR on UPI payments during various sittings of the committee.“Even on the principle or conceptual basis of MDR as my colleague Gaurav Gogoi points out concerns were raised by members with regard to its need, efficacy, etc., over the course of various sittings of the committee,” Tewari said.“To claim that a particular measure was supported by ‘certain members’ of the committee is an inaccurate and fallacious characterisation of the confidential proceedings of a Parliamentary Committee,” he added.This comes a day after a government functionary claimed that Congress MPs, including former finance minister P Chidambaram and former minister in the UPA government Manish Tewari, supported the government’s decision during the parliamentary panel’s proceedings.“Why is Rahul Gandhi opposing something his own MPs, including former finance minister P Chidambaram and former minister in the UPA government Manish Tewari, supported within the parliamentary panel?” news agency PTI reported a functionary as saying.According to the report of the standing committee headed by BJP MP Bhartruhari Mahtab, the panel noted its earlier recommendation emphasising that due to the imperative of a viable revenue model, legislative-enabling provisions for a tiered MDR structure have been brought forward.However, the committee remained deeply concerned by the staggering mismatch between the Rs 2,000-crore allocation and the industry’s estimated operational cost of Rs 20,700 crore.In the view of the committee, while statutory enablement now exists to permit calibrated MDR on high-value transactions, any delay in notifying and operationalising this framework leaves payment service providers heavily dependent on inadequate subsidies, thereby threatening critical investments in cybersecurity, fraud prevention and network infrastructure.
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On the incentive scheme for promotion of RuPay debit cards and low-value BHIM-UPI transactions (person-to-merchant), the committee, in its report, observed and recommended: “The Committee notes the massive Rs 2,000 crore budgetary allocation for 2026-27 designed to offset ecosystem costs caused by the zero-MDR policy on RuPay and low-value UPI transactions.“The Committee observes 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 merely 11% of the industry’s actual costs and 14% of potential MDR collections, creating a structural funding gap impacting long-term infrastructural investment.”The committee recommended that while the proposed three-year multi-year scheme and cashback components are necessary to democratise digital payments in untapped Tier 3-6 cities, the Department of Financial Services must concurrently explore a self-reliant, tiered revenue model.
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