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Correspondent

21 August 2024 at 10:20:16 am

Fee Signal

The government’s decision to create a legal framework for levying charges on UPI transactions has understandably triggered concern, even though it insists that ordinary users and small merchants will continue to enjoy free payments. The proposed amendment does not impose a fee on UPI today. But it removes the statutory barrier to one being imposed in the future, making the government’s reassurance less than the final word. The government argues that this is a measure for UPI’s long-term...

Fee Signal

The government’s decision to create a legal framework for levying charges on UPI transactions has understandably triggered concern, even though it insists that ordinary users and small merchants will continue to enjoy free payments. The proposed amendment does not impose a fee on UPI today. But it removes the statutory barrier to one being imposed in the future, making the government’s reassurance less than the final word. The government argues that this is a measure for UPI’s long-term sustainability. The world’s largest real-time payments system, which processed 2,366 crore transactions worth Rs. 29.9 lakh crore in July alone, cannot indefinitely depend on subsidies as transaction volumes, cybersecurity requirements and infrastructure costs rise. A nominal Merchant Discount Rate on larger merchant transactions, it says, would help create a more sustainable ecosystem without burdening ordinary users. That argument has merit. But so does the concern that a payment system which became a national habit precisely because it was cheap and frictionless should not slowly acquire a price tag. Once the legal machinery for charging exists, there is no guarantee that the boundary between large merchants and small ones, or between merchants and consumers, will remain permanently fixed. The Finance Minister has clarified that any Merchant Discount Rate will apply only to a limited set of merchant transactions above a threshold and will be nominal, well below card-payment rates. The details will eventually be decided by the UPI and Services Steering Committee headed by the National Payments Corporation of India. In other words, there is no charge on the table for the ordinary UPI user today. But there is now a legal mechanism for charges to be introduced tomorrow. That is precisely why any alarm, though exaggerated, cannot simply be dismissed. The government, through its clarification, has reassured that UPI’s free-to-consumer model remains intact. The important issue is whether its financing model can evolve without undermining the habits that made it revolutionary. UPI succeeded partly because it made digital payments cheaper and simpler than alternatives. There is also a larger principle at stake. UPI is not merely another commercial payments platform. It is the product of public investment, regulatory architecture and private innovation. The state should therefore be wary of treating its sustainability as an ordinary market problem. The sensible answer lies between free-for-all subsidies and indiscriminate fees: transparent thresholds, genuinely low MDRs, strong protection for small merchants and an absolute firewall around ordinary consumers. The government should publish the economic case for any future charge, including its effect on merchants and consumers. UPI was built on trust as much as technology. The government is right to protect its remarkable achievement. It should remember that keeping UPI free is not merely a political promise. It is part of the product.

Legal notice threatens Sunetra’s NCP presidency

Mumbai: The Nationalist Congress Party (NCP) is weathering a fresh political storm as newly elected National President and Deputy Chief Minister Sunetra Pawar faces a direct legal challenge to her leadership. Elevated to the top posts following the tragic accidental demise of former Deputy Chief Minister Ajit Pawar, Sunetra Pawar is now navigating a complex internal rebellion. A legal notice served by a senior party functionary demanding the annulment of her election has not only raised the startling possibility of her having to step down from the presidency but has also ignited intense speculation among party insiders regarding who might truly be orchestrating this proxy battle from behind the scenes.


The crisis was triggered on July 9 when Sachchidanand Singh, the NCP’s Jharkhand State President and a party veteran of 15 years, served a legal notice through his lawyer. Directed at Sunetra Pawar as party president, Praful Patel as working president, and Brijmohan Srivastava as party secretary, the notice claims that the February 26 election for the top post was fundamentally invalid and unconstitutional.


Singh, who was appointed as National Secretary in December 2023 by the late Ajit Pawar but unceremoniously excluded from the new national executive committee, has demanded that the current election be scrapped and a fresh one be conducted under an independent and impartial election officer. Crucially, the notice demands that until a new election is held, Sunetra Pawar’s position and the revised list of office-bearers be considered null and void, a move that would effectively force her immediate ouster.


Procedural Expose

The legal challenge hinges on deep procedural technicalities that expose the fragile transition of power within the NCP. According to the notice, following Ajit Pawar’s demise on January 28, the party submitted an amended constitution to the Election Commission on February 17, vesting Praful Patel with the powers of the National President until a permanent leader was elected. Singh has questioned under what authority Brijmohan Srivastava convened the pivotal February 26 meeting instead of Patel. Furthermore, he alleged that consent from the then-national executive members was bypassed for crucial communications sent to the Election Commission on February 18.


While the legalities are complex, the political implications are profound. The sheer audacity of the notice has set the rumor mills ablaze within the NCP, with party insiders quietly speculating whether Singh is acting independently out of personal grievance over his exclusion, or if he is acting as a frontline proxy for disgruntled heavyweight factions maneuvering for ultimate control of the party.


Trivial Issue

Amidst the brewing storm, the NCP’s top brass has attempted to project a picture of absolute unity while swiftly dismissing the rebellion. Senior party leader and NCP State President Sunil Tatkare sought to brush away the controversy, characterising the legal notice as a trivial issue completely devoid of factual or legal substance. Asserting that the election of ‘Vahini’ (Sunetra Pawar) was conducted with strict adherence to the party constitution, laws, and democratic norms, Tatkare emphasised that the opinion of a single disgruntled individual does not reflect systemic unrest within the larger organisation.


He firmly stated that the party’s core committee would convene imminently to consult legal experts and take appropriate disciplinary decisions against those responsible for the notice. However, despite Tatkare’s confident efforts to downplay the crisis, the looming legal battle and the swirling internal suspicions pose a critical test for Sunetra Pawar’s nascent leadership at a highly vulnerable juncture for the party.


“There is no rift in the party. All senior party leaders meet with Sunetra Pawar to discuss political issues. The letter written by Sachchidanand Singh carries no weight. Any issue should be resolved amicably in the interest of the party."

Praful Patel, Leader, NCP

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