UPI Fee Row: Govt Questions Rahul Gandhi's Stand, Cites Five Congress MPs on Finance Panel

The Centre has questioned Congress leader Rahul Gandhi’s opposition to the newly announced Merchant Discount Rate (MDR) framework for UPI payments, pointing to a Parliamentary Standing Committee on Finance report that recommended a tiered revenue model for the digital payments ecosystem. A senior government functionary said five Congress MPs who were members of the Finance Committee were present when the panel adopted its report on August 12. The MPs were former finance minister P Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K Gopinath. The government functionary said no dissent was recorded in the published minutes.

“Why is Rahul Gandhi opposing something his own MPs, including P Chidambaram and Manish Tewari, supported within the parliamentary panel?” the functionary was quoted as saying. The government’s remarks came after Gandhi criticised the Centre’s decision to introduce charges on certain UPI merchant transactions and demanded that the move be withdrawn.

The Finance Committee had called for a tiered MDR and revenue framework for UPI and said the system should be notified and implemented without delay. The panel linked the need for a sustainable revenue mechanism to the growing financial requirements of the UPI ecosystem. The committee also highlighted the difference between government support for UPI and the estimated cost of operating the ecosystem. According to the report cited in the government’s argument, the Centre had allocated ₹2,000 crore for supporting UPI in 2026-27, while the industry’s estimated annual operational requirement was around ₹20,700 crore.

The political row has intensified following the government’s decision to introduce a 0.4 per cent MDR on specified UPI merchant transactions above ₹2,000 from October 15. The new framework keeps person-to-person UPI transfers free and provides exemptions or lower charges for certain categories of merchants and sectors. The government has described the MDR as a charge within the payments ecosystem rather than a tax on users. It has also said banks and UPI service providers will not be allowed to directly pass the MDR on to consumers.

Gandhi, however, has opposed the new framework and termed the charge a “UPI tax”, while demanding its rollback. The Congress leader has also raised allegations concerning the broader economic and political implications of the decision. The government has rejected those claims and defended the framework as part of an effort to make the UPI ecosystem financially sustainable. UPI has become the backbone of India’s digital payments system. The platform processed 24.5 billion transactions worth nearly ₹29.8 trillion in August 2026, according to Reuters.

The latest dispute therefore centres on both the economic design of UPI and the political interpretation of the Finance Committee’s recommendation. While the government is citing the committee report and the participation of Congress MPs, the available reporting establishes their presence during adoption of the report and the absence of recorded dissent; it does not by itself establish that each of the five MPs separately endorsed every provision of the government’s subsequently announced MDR framework.

Disclaimer: This image is taken from PTI.