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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.)

Maharashtra’s Ambedkarite Dilemma

May 15
4 min read

Few states have shaped India’s political imagination as profoundly as Maharashtra. From the freedom struggle to labour agitations, from anti-caste reform movements to modern coalition politics, the state has repeatedly generated ideas that altered the country’s political vocabulary. Among the communities that most decisively influenced this journey, the Scheduled Castes occupy a singular place. Yet for all their ideological depth, emotional solidarity and historic legacy, Scheduled Caste politics in Maharashtra has never evolved into a stable electoral force on the scale seen in Tamil Nadu.


That paradox now sits at the centre of a serious political question: can Maharashtra’s Scheduled Caste community emerge as a consolidated and decisive vote bank of the sort that has shaped politics in southern India for decades?


According to the 2011 Census, Scheduled Castes constitute roughly 11.81 percent of Maharashtra’s population of over 11 crore people—around 1.33 crore citizens. Though lower proportionately than Tamil Nadu’s Scheduled Caste population of more than 20 percent, Maharashtra’s vast size gives the community considerable electoral importance across urban and semi-urban belts such as Mumbai, Pune, Nagpur, Vidarbha and Marathwada. But numbers alone do not create political unity.


Dr. Babasaheb Ambedkar became the moral and intellectual foundation of modern social justice politics in India. He offered a philosophy of emancipation through education, rights and constitutional morality.


One of the defining moments in Maharashtra’s political history came in October 1956, when Ambedkar embraced Buddhism in Nagpur alongside nearly five lakh followers. This was political theatre of the highest order: a declaration of self-respect and a rejection of entrenched social humiliation. And yet, this emotional solidarity has rarely translated into sustained electoral cohesion for Ambedkarites.


Multiple Factions

After Ambedkar’s death in 1956, the Republican Party of India (RPI) emerged with the ambition of carrying forward his political vision. In its early years, the party showed promise, especially in constituencies with sizeable Scheduled Caste populations. But ideological disagreements, personality clashes and disputes over alliances, particularly with the Congress, soon hollowed it out. Over time, the RPI fragmented into multiple factions, each carrying fragments of Ambedkar’s legacy but little of his mass political force.


Today, the once-formidable Republican movement had splintered into several marginal outfits, many dependent on alliances with larger parties for relevance. The contrast with Ambedkar’s original political ambitions could scarcely have been sharper.


The state witnessed another wave of Scheduled Caste assertion in the 1970s with the rise of the Dalit Panthers. Inspired partly by the Black Panther movement in the United States, young writers, activists and poets began confronting caste violence and discrimination with unprecedented intensity. Figures such as Namdeo Dhasal and Raja Dhale became symbols of cultural rebellion.


The Panthers transformed Maharashtra’s social discourse. Poetry, literature and street protest became instruments of political awakening. But the movement, for all its cultural power, lacked booth-level organisation, financial networks, disciplined cadre structures and a unified leadership.


Nowhere was this contradiction more visible than in Marathwada during the Namantar Andolan, the movement to rename Marathwada University after Ambedkar. When the Maharashtra legislature approved the renaming in 1978, violent protests erupted across the region. Scheduled Caste families were attacked, homes burned and social boycotts imposed. The agitation lasted nearly sixteen years before the university was finally renamed Dr. Babasaheb Ambedkar Marathwada University in 1994. But even such a prolonged and emotionally charged struggle failed to produce a permanent political front.


Tamil Nadu followed a different path altogether. For decades, politics there revolved around organised identity movements that evolved into formidable political institutions. Parties such as the Dravida Munnetra Kazhagam and the All India Anna Dravida Munnetra Kazhagam converted social mobilisation into disciplined electoral machinery. Since 1967, Dravidian parties have dominated Tamil Nadu’s politics with remarkable continuity.


Their success rested not merely on rhetoric, but on institution-building: local leadership structures, welfare networks, women’s wings, grassroots workers and long-term voter loyalty. Scheduled Caste voters became integrated into broader social coalitions that remained politically organised over generations.


Fragmented Politics

Maharashtra’s politics, by contrast, remains profoundly fragmented. Scheduled Caste voters are distributed across multiple parties. Some continue to support the Congress because of its historical association with Ambedkarite politics. Others gravitate towards the Bharatiya Janata Party, particularly after leaders such as Ramdas Athawale aligned with the BJP-led alliance. Younger voters increasingly prefer issue-based politics centred on education, employment and representation, while many continue to follow regional or sub-caste leaders rather than a common ideological platform.


The internal diversity of Maharashtra’s Scheduled Castes further complicates consolidation. The Mahar community has historically dominated Ambedkarite politics, but communities such as the Matangs and Charmakars often follow different political trajectories. Political parties have skilfully exploited these divisions by fielding candidates from different sub-castes in reserved constituencies.


Recent years have nevertheless produced attempts to revive independent Bahujan politics. The most ambitious came through Prakash Ambedkar and the Vanchit Bahujan Aghadi. When launched in 2018, the VBA generated substantial excitement among marginalised communities. In the 2019 Lok Sabha elections, it secured nearly 7 percent of the vote.


Yet, the momentum faded quickly. By the 2024 elections, the party had struggled to convert support into seats. Still, the VBA demonstrated that even when Scheduled Caste voters are not electorally united, they remain capable of decisively altering electoral outcomes.


A younger generation is now reshaping the debate altogether. Social media activism, student movements and conversations around reservation, education and social mobility have created a politically aware constituency that is less interested in symbolic politics alone.


Mainstream parties understand this well. Almost every major political formation now celebrates Ambedkar Jayanti, foregrounds social justice schemes and showcases Scheduled Caste leaders prominently during elections.


Can Maharashtra therefore produce a Scheduled Caste vote bank comparable to Tamil Nadu’s? Yes and no.


Yes, because the state possesses all the raw ingredients: a towering ideological legacy through Ambedkar, a deeply rooted emotional identity and an increasingly politically conscious electorate.


No because Maharashtra’s political culture is fundamentally more fractured. Regional equations, sub-caste divisions, leadership rivalries and shifting economic aspirations make complete consolidation difficult.


Perhaps, Maharashtra will not replicate Tamil Nadu’s model at all. Perhaps its Scheduled Castes will evolve something more fluid and, in some ways, more formidable: not a permanent vote bank, but a politically aware electorate capable of shifting power equations whenever it chooses to act collectively.

 

(The writer is a political observer. Views personal.)

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