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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.)

Pakistan’s Floods: Climate Curse or Man-Made Failure?

Sep 23, 2025
4 min read

Climate change may fuel Pakistan’s floods, but governance failures are turning them into catastrophes.

Pakistan is once again under water. Vast stretches of Sindh and Baluchistan resemble inland seas. Villages remain cut off; families huddle on rooftops and rescue boats are guided by drones through treacherous waters. Entire districts are submerged while are millions displaced and much of the country’s fragile infrastructure lies in ruins. The government describes this as the worst flooding in four decades - a grim reminder of the deluge of 2022, which left nearly a third of Pakistan submerged, killed more than 1,700 people and displaced millions.


Meteorologists report that rainfall in key provinces has exceeded seasonal averages several times over. The monsoon, supercharged by global warming, has turned unpredictable and more destructive. Climate scientists warn that South Asia, home to one-quarter of the world’s population, is especially exposed to shifts in weather patterns: hotter air holds more moisture, producing heavier downpours. For Pakistan, which relies heavily on the monsoon and is flanked by fragile glacial systems, the risks are existential.


Reckless expansion

Yet the devastation cannot be explained by climate alone. Pakistan’s floods are not just acts of nature but also of neglect. Outdated drainage, dilapidated embankments and reckless expansion into floodplains magnify the toll. Defence and counterterrorism continue to dominate the national budget, while flood-control projects are underfunded or abandoned. Corruption corrodes what little planning exists. The result is a country that greets each monsoon not with resilience but with dread.


This neglect has deep roots. Since the 1950s Pakistan has depended on foreign donors to plug gaps in disaster response. Earthquakes, droughts and especially floods have triggered billions of dollars in aid from the World Bank, IMF, America and countless emergency agencies. Yet the money has rarely translated into robust defences. Much of it is spent on immediate relief, absorbed into bureaucracy, or simply disappears. The unprecedented pledges of support after the 2022 floods, which the UN called a “climate catastrophe” were a squandered opportunity. Little of that money was invested in early-warning systems, resilient infrastructure or proper drainage.


Misplaced priorities

While Pakistan’s generals insist on swelling defence budgets to confront enemies, real or imagined. Political leaders, for their part, prefer the short-term optics of relief distribution to the slow grind of building embankments or regulating urban growth. Pointing fingers at India has become a well-worn reflex. Floods, droughts and water scarcity are framed as the result of hostile meddling. Such deflection may serve politics, but it leaves Pakistanis exposed when the waters rise.


Urbanisation has compounded the problem as cities sprawl chaotically into riverbeds and floodplains. Developers, often politically connected, pave over natural drainage channels. Informal settlements mushroom without planning permission, leaving their residents dangerously exposed. In rural areas, where most of the population lives, flood defences are weak or absent altogether. Embankments crumble, canals silt up and dams remain poorly maintained. In such conditions, even ordinary monsoons overwhelm the system.


Chronic underfunding

The financial crisis makes matters worse. Pakistan’s foreign reserves are thin, its debt unsustainable, its rupee in chronic decline. With little fiscal room, long-term adaptation is endlessly deferred. What scarce funds exist are consumed by subsidies, debt repayments and security outlays. Disaster-resilience schemes, by contrast, are chronically underfunded and often stalled midway.


The consequences are devastating not only for human lives but also for the economy. Agriculture, the country’s largest employer and biggest export earner, is repeatedly battered. Cotton fields vanish under water, livestock perish and food inflation soars. Roads, railways and power lines are washed away, further hobbling growth. Each flood wipes out years of progress, trapping communities in a cycle of destruction and recovery.


The irony is that Pakistan is among the world’s lowest emitters of greenhouse gases, being responsible for less than one percent of global emissions. Yet it ranks among the most climate-vulnerable. Successive governments have seized on this disparity to demand more aid from the West, portraying the floods as punishment for others’ pollution. There is some truth in that argument. But to stop there is to miss half the story as the scale of destruction is not dictated by rainfall alone but by the state’s failure to prepare.


The path forward is clear, if politically unpalatable. Investment must shift from guns to embankments, from short-term relief to long-term resilience. Cities need stricter zoning laws to halt construction on floodplains. Rural areas require properly maintained canals and embankments. Drainage systems, many dating back to colonial times, must be modernised. Transparent use of aid, subject to scrutiny by both donors and domestic watchdogs, could help restore public trust.


None of this is easy in a country beset by political turmoil, insurgencies and economic collapse. But Pakistan has little choice. Climate change will continue to intensify. Glacial melt in the Himalayas and erratic monsoons will only increase flood risks. Without urgent reforms, each disaster will be worse than the last.


For decades Pakistan’s leaders have treated floods as an act of fate, to be endured rather than managed. But fate is not the only culprit. The waters rise because the state has failed to build barriers, both physical and institutional, against them. Unless Pakistan confronts this uncomfortable truth, it will remain trapped in its cycle of deluge and neglect.


(The author is a Mumbai-based educator and an expert on the Indus Waters Treaty. Views personal.)

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