Diverting attention from gigantic backlash: Congress denies its MPs backing UPI fee

The Congress on Thursday rejected claims that its MPs on the Parliamentary Standing Committee on Finance had backed the decision to levy a fee on high-value UPI payments. The party said the government was trying to shift attention from the backlash over the move to charge merchants on UPI payments above Rs 2,000. The row escalated after the government questioned Rahul Gandhi's criticism of the decision and said a parliamentary panel had supported such a framework, with Congress members present when the report was adopted.

Congress leaders, however, said no specific proposal on the recent UPI fee was ever placed before the committee and denied suggestions that they had endorsed it.A senior government functionary said the Parliamentary Standing Committee on Finance had pushed for a tiered Merchant Discount Rate, or MDR, revenue framework for the Unified Payments Interface, and had said it should be notified and put in place without delay.The functionary said five Congress MPs, including P Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K Gopinath, were present on August 12 when the report was adopted and that no dissent was recorded in the published minutes.Rejecting the claim, Congress MP Gaurav Gogoi said the finance committee did not discuss the UPI tax proposal announced by the government recently.

He said the Department of Finance did not have any specific proposal on a UPI tax when it met members of the committee. Gogoi said questions were raised on the need for MDR, but government representatives did not have specific or satisfactory answers at that stage.In a post on X, Gogoi said, "I reiterate that the recent UPI tax policies hurt small Indian merchants, vendors, entrepreneurs and help the major American corporations.

Roll back UPI tax. Stop surrendering, PM Modi." Tagging Gogoi's post, Congress general secretary in charge of communications Jairam Ramesh said, "The news plantation economy which has thrived in the Modi regime stands exposed. Glad you rebutted." In another post, he said these were "pathetic" attempts by the Modi government to divert attention from the "gigantic backlash" over the "UPI tax" decision taken to "appease US companies and Donaldbhai".

Congress MP Manish Tewari also criticised the government. He said, "Unfortunately, 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 added, "My colleague Gaurav Gogoi is correct – no specific proposal qua the recent Merchant Discount Rate to be levied on UPI transactions from October 15, 2026, was ever brought before the Parliamentary Standing Committee on Finance – rate, quantam, amount of fee to be charged, ceiling and exemption slabs, etc."

Tewari said that even on the broader principle of MDR, concerns had been raised by members over its need and efficacy during various sittings of the committee. He also 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." The government functionary had asked, "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?"

Gandhi, reacting to the decision to levy a fee on UPI payments above Rs 2,000 to merchants, alleged that Prime Minister Narendra Modi had decided to "prostrate" before US President Donald Trump and give a huge amount of money to America. The Leader of Opposition in the Lok Sabha also demanded that the decision be rolled back.According to the report of the standing committee headed by BJP MP Bhartruhari Mahtab, the panel referred to its earlier recommendation that, because a viable revenue model was needed, legislative provisions allowing a tiered MDR structure had been brought forward.

At the same time, the committee expressed concern over what it called the mismatch between the Rs 2,000-crore allocation and the industry's estimated operational cost of Rs 20,700 crore.The report said that while legal provisions now existed to allow a calibrated MDR on high-value transactions, any delay in notifying and operationalising such a framework would leave payment service providers dependent on what it saw as inadequate subsidies, affecting investments in cyber security, fraud prevention and network infrastructure.On the incentive scheme for RuPay debit cards and low-value BHIM-UPI person-to-merchant transactions, the committee observed that the Rs 2,000-crore allocation for 2026-27 was meant to offset ecosystem costs arising from the zero-MDR policy on RuPay and low-value UPI transactions.The committee further said the present incentive covered only 11 per cent of the industry's actual costs and 14 per cent of potential MDR collections, creating a funding gap that could affect long-term infrastructure investment.

It recommended that while the proposed three-year scheme and cashback components were needed to expand digital payments in Tier 3 to Tier 6 cities, the Department of Financial Services should also explore a self-reliant, tiered revenue model.The political dispute, however, remained centred on whether that amounted to support for the government's specific UPI fee decision, a claim the Congress has firmly denied.- EndsPublished By: India Today Web Desk Published On: Sep 17, 2026 14:40 IST