Nirmala Sitharaman Clarifies UPI Charge Claims

Finance Minister Nirmala Sitharaman has responded to senior Congress leader Jairam Ramesh's criticism of the Taxation and Other Laws (Amendment) Bill, 2026, regarding UPI transactions.

On Thursday, Sitharaman clarified that the Merchant Discount Rate (MDR) applies only to merchants and not to end users or customers.

She stated that this move would enable banks and fintech companies to invest more in infrastructure, innovation, and security, ultimately benefiting all UPI users.

Sitharaman criticized Ramesh for spreading misinformation about the proposed changes, saying he should consider the facts before speaking out.

The minister also criticized the Congress for raising the issue outside Parliament instead of debating it during the legislative process.

She said the matter could have been discussed on the floor of the House if the party had engaged constructively when the Bill was tabled in the Lok Sabha and Rajya Sabha.

Earlier, Jairam Ramesh had alleged that the proposed amendment removes the statutory guarantee that has kept UPI transactions free of charges, potentially allowing for the future imposition of MDR on digital payments.

Ramesh claimed that any such levy would ultimately be passed on to ordinary users.

However, Sitharaman's clarification suggests that MDR will not be applied to end users.

The Congress leader had also rejected the government's argument that charging MDR is necessary to make UPI financially sustainable, citing the Reserve Bank of India's surplus transfer of Rs 2.86 lakh crore to the Centre in 2025-26.

The debate surrounding UPI transactions and MDR has sparked a discussion about the future of digital payments in India.

The government's proposed amendment aims to support the growth of digital payments, while also ensuring that the system is financially sustainable.

As the debate continues, it remains to be seen how the proposed changes will impact UPI users and the digital payments industry as a whole.

In conclusion, the Finance Minister's clarification on MDR has provided some insight into the government's plans for UPI transactions, but the issue is likely to remain a topic of discussion in the coming days.