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By:

Sumit Ranjan Das

21 August 2024 at 4:08:59 pm

UPI Must Stay Free

AI Generated Image Yesterday, I went to my neighbourhood shop to buy aloo chop and vegetable chop to eat with muri. I reached for my phone to pay by UPI, as I do for almost everything. The shopkeeper stopped me. “This is the last time we’ll accept UPI. From tomorrow, CASH ONLY.” I didn’t argue or explain that payments up to Rs. 2,000 remain free. It would have been a waste of breath. So I let it go, but I kept thinking about it on the walk home because I think I know what he was afraid of....

UPI Must Stay Free

AI Generated Image Yesterday, I went to my neighbourhood shop to buy aloo chop and vegetable chop to eat with muri. I reached for my phone to pay by UPI, as I do for almost everything. The shopkeeper stopped me. “This is the last time we’ll accept UPI. From tomorrow, CASH ONLY.” I didn’t argue or explain that payments up to Rs. 2,000 remain free. It would have been a waste of breath. So I let it go, but I kept thinking about it on the walk home because I think I know what he was afraid of. Picture a vegetable vendor with a pushcart at the corner of your lane. Call him Ramesh. He studied up to Class 8. Two years ago, he put a QR code on his cart because someone told him one thing: “Bhaiya, UPI is free. The money comes straight to your bank.” That one sentence did more for Digital India than any seminar. No card machine, no fee, no paperwork. Now tell Ramesh that a Merchant Discount Rate (MDR) may apply to specified transactions above Rs. 2,000, subject to exemptions. He won’t argue. He will put up a board: CASH ONLY. MDR is the fee a merchant pays to accept a digital payment, and UPI has been free for merchants since 2020. The new framework proposes a fee of 0.4 per cent on specified merchant transactions above Rs. 2,000, with a cap of Rs. 300 on transactions above Rs. 75,000. Payments up to Rs. 2,000 remain free. Person-to-person transfers are not covered, and under the announced plan, customers are not charged directly. On a Rs. 10,000 merchant payment, the merchant would pay Rs. 40. Small merchants receiving less than Rs. 1,00,000 a month through UPI were proposed to be exempt. One report adds that the committee was reportedly considering exempting businesses with annual turnover of up to Rs. 40 lakh. On October 13, the National Payments Corporation of India (NPCI) said the fee, due to be implemented on October 15, would be introduced immediately after Diwali, on a date to be notified separately. The decision merley postpones the fee. Consider Ramesh again. Suppose he sells Rs. 5,000 worth of vegetables a day, mostly through payments of Rs. 30 to Rs. 300. That amounts to around Rs. 1,50,000 a month, or roughly Rs. 18 lakh a year. Every one of his payments is below Rs. 2,000, so under the proposal, they remain free. But his monthly receipts exceed Rs. 1 lakh, which means he cannot simply assume that the small-merchant exemption covers him. Who will tell him? Who will explain it in Bengali, Hindi or Maithili, at his cart, in two minutes? A vendor who cannot understand the rules will choose the option that feels safest: cash. Cash is not the enemy. But for a small merchant, it also means hunting for change and losing customers who do not have it, facing the risk of theft, loss and counterfeit notes, spending time counting, storing and depositing money, and having fewer digital records to show a bank when seeking credit. “Free” does not mean UPI costs nothing to run. Security, fraud control, banking systems and customer support all require money. In March 2025, the Union Cabinet approved an incentive of Rs. 1,500 crore for low-value BHIM UPI merchant transactions for the financial year 2024–25. Genuine welfare must never be treated as a piggy bank. Every rupee, whether spent on welfare or infrastructure, should deliver greater value. Five measures would help keep UPI simple. First, person-to-person UPI transfers must remain free. Sending money to family should never come with an unexpected charge. Second, protection for small merchants must be straightforward. Thela-walas, tea stalls and kirana shops need one clear exemption, not five clever ones. Third, UPI must be funded transparently. The government and relevant institutions should publish what it costs to run the system, how much public money supports it, how much any proposed fee collects and what results follow. Fourth, the rules must be explained in local languages. A one-page notice or a short voice message through a payment app would reach Ramesh faster than a 20-page circular. Finally, the impact must be measured before any fee is extended. Changes in small-merchant acceptance and transaction volumes should guide the next step. India did not build UPI by making it clever. It built it by making it simple and free. (The writer is a Cost and Management Accountant and founder of TaxoDas. Views personal.)

Controversy over shifting plot

Apr 9
2 min read

Questions over corporation’s plan to abandon self-owned piece of land   

Ruparani Nikam
Ruparani Nikam

Kolhapur: A fresh controversy has surfaced over the proposed construction of the Kolhapur Municipal Corporation’s (KMC) new administrative building, with questions being raised over the apparent shift from a prime, self-owned plot at Nirmal Chowk to an alternative site at Shendapark.

 

The civic body, which has been functioning out of the historic Gandhi Market building since its days as a nagarpalika during the princely era, was upgraded to a municipal corporation in 1972. However, despite a significant expansion in its administrative scope over the decades, the KMC has yet to acquire a modern, purpose-built headquarters.


At the centre of the present debate is a 9-acre-36-guntha plot at Nirmal Chowk considerably larger than the five-acre Shendapark site now being proposed.

 

The Nirmal Chowk land has long been in the corporation’s possession, and even a property card had been issued following the resolution of disputes by the district administration.


Despite this, the civic body has now indicated that the new headquarters will be constructed at Shendapark, prompting questions over the rationale behind abandoning a larger, strategically located plot.

 

Complicating matters further is a prolonged legal dispute over the Nirmal Chowk land. While the preparation of a property card typically nullifies the relevance of the 7/12 extract under Maharashtra land records, claims based on the latter continued to surface, with some parties asserting ownership and keeping the dispute alive.

 

Critics allege that the civic administration failed to pursue the case with due diligence, at times remaining absent during key hearings. It was only after an intervention through a separate petition filed by Dilip Desai of a local civic group that the matter regained traction. The case is now slated for hearing before the Kolhapur circuit bench of the Bombay High Court in June.

 

Observers argue that instead of strengthening its legal position and securing the valuable land estimated to be worth around Rs 40 crore the KMC appears to have shifted focus to the Shendapark site. This, they say, raises concerns about the intent behind the change in location.

 

Notably, as far back as December 2003, the corporation had organised an architectural design competition for constructing a modern headquarters at Nirmal Chowk. A contemporary design was finalised, but the project has seen little progress in over two decades.

 

In contrast, several municipal corporations across Maharashtra have since developed modern administrative complexes, while Kolhapur continues to operate out of cramped premises in Gandhi Market, with even council proceedings often conducted under space constraints.

Civic activists contend that had the KMC pursued the Nirmal Chowk project with consistency and resolved legal hurdles in time, the city would not have risked losing control over a high-value public asset.

 

With the shift to Shendapark now underway, concerns are also being voiced about the future of other public spaces in the city. Activists warn that if such decisions go unchallenged, it could set a precedent affecting open spaces in urban layouts.

 

The controversy has triggered demands for greater transparency and accountability in the civic body’s land-use decisions, with residents seeking clear answers on why the original site was sidelined and who stands to benefit from the change.

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