UPI Charges Controversy: Nirmala Sitharaman Slams Jairam Ramesh, Asks Why He Didn’t Raise Issue in Parliament

The Centre has clarified its position on the proposed changes related to UPI transactions, with Union Finance Minister Nirmala Sitharaman rejecting Congress leader Jairam Ramesh’s claims over the issue. Sitharaman said concerns about UPI charges were baseless and stressed that the Merchant Discount Rate (MDR) would apply to merchants, not ordinary consumers.

Will UPI Charges Affect Consumers?

According to Finance Minister Nirmala Sitharaman, the proposed MDR mechanism would not directly affect customers using UPI services.

Sitharaman clarified that MDR is applicable to merchants and not ordinary consumers. She said UPI services for customers would continue as they currently do.

The Finance Minister also argued that the move could benefit the broader digital payments ecosystem. According to her, additional revenue for banks and fintech companies could help them invest in UPI infrastructure, technology and security, ultimately strengthening the system for users.

Sitharaman Questions Congress Over Parliament Debate

Sitharaman also questioned the Congress party’s approach to the issue, asking why concerns were being raised outside Parliament instead of being discussed on the floor of the House.

She argued that the government’s proposed legislation could have been debated constructively in Parliament, where opposition parties could have presented their concerns and suggestions.

What Did Jairam Ramesh Say About UPI Charges?

Congress leader Jairam Ramesh had earlier raised concerns about the proposed amendments.

Ramesh claimed that the Taxation and Other Laws (Amendment) Bill, 2026 could effectively remove the statutory guarantee of free UPI services and potentially create a pathway for Merchant Discount Rate charges on digital payments in the future.

He also argued that merchants could eventually pass such costs on to consumers.

Ramesh further pointed to the Reserve Bank of India’s surplus transfer to the central government. He cited an RBI surplus transfer of ₹2.86 lakh crore for 2025-26 and questioned the need for additional charges to support digital payment infrastructure.

UPI Charges Controversy: 5 Key Points

1. MDR applies to merchants:

The Finance Minister said the proposed MDR burden would apply to merchants rather than ordinary UPI users.

2. Consumers and UPI payments:

Sitharaman maintained that UPI services for customers would remain unchanged.

3. Investment in UPI infrastructure:

The government says the mechanism could help banks and fintech companies invest in technology, infrastructure and payment security.

4. Congress raises concerns over free UPI:

Jairam Ramesh has argued that the proposed amendment could open the door to charges on UPI transactions in the future.

5. RBI surplus becomes part of the debate:

Ramesh cited the RBI’s ₹2.86 lakh crore surplus transfer for 2025-26 while questioning the need for additional charges to support digital payments.

UPI Charges Explained: What Happens Next?

The controversy centres on whether the proposed legislative changes could eventually lead to MDR being imposed on UPI transactions and whether those costs could ultimately reach consumers.

The government, however, has maintained that ordinary UPI customers will not bear the MDR burden. The Congress has raised concerns about the possible future implications of the proposed changes.

As the debate continues, the key issue for UPI users remains whether any future changes to the payment ecosystem could affect the cost of digital transactions.