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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.)

Pawar vs Pawar: A Dynasty Divided

Apr 10
4 min read

In Maharashtra’s long and complicated history of politics, very few stories are as fascinating or as layered as the silent but very real tug-of-war happening inside the Pawar family. On one side stands the patriarch, 85-year-old Sharad Pawar, one of India’s sharp political minds who has been Chief Minister of Maharashtra four times.


On the other stands Parth Pawar, his grandnephew and son of the deceased Ajit Pawar, who has just been sworn in as a Rajya Sabha MP. While Sharad Pawar, as the chief of NCP (SP), was fielded by the opposition alliance Maha Vikas Aghadi (MVA), Parth was fielded by the NCP aligned with the ruling Mahayuti alliance led by Chief Minister Devendra Fadnavis.


To understand why Sharad Pawar is unhappy with Parth, one must understand why the octogenarian is miffed with Fadnavis. In 2014, when Fadnavis first became the Chief Minister of Maharashtra, Pawar Sr. had quietly hoped that Eknath Khadse, then a senior BJP leader from north Maharashtra, who was known to be friendly with the undivided NCP, would get the top job. If Khadse became CM, Sharad Pawar believed he could control the State government’s decisions from behind the scenes.


But the smart and careful Fadnavis got the job instead, throwing cold water over Pawar’s plans. Still, Maharashtra’s Machiavelli tried to adjust. He gave indirect support to the BJP government during a difficult period when the BJP and Shiv Sena were quarrelling with each other.

But Fadnavis was always one step ahead. He outplayed his intra-party BJP rivals like Khadse, Vinod Tawde and Pankaja Munde.


Byzantine Intrigue

In July 2023, Ajit Pawar’s defection to the Mahayuti and splitting of the NCP was a major blow for Sharad Pawar. While some claim Pawar had fought hard to stop this from happening, other ‘conspiracy theorists’ believe that it was actually Sharad Pawar’s own strategy to align with the ruling BJP and return to power.


After all, a similar move had occurred in 2019, when Fadnavis and Ajit Pawar startled Maharashtra with their infamous early morning oath-taking ceremony. However, that arrangement collapsed soon after, reportedly due to Sharad Pawar’s intervention.


It is said that this incident deeply upset both Ajit Pawar and Devendra Fadnavis, who, since then developed a strong tacit understanding. Many feel that it was this growing closeness that has also strengthened the position of Parth Pawar and Sunetra Pawar today. Some political observers believe that this entire chain of events has quietly reshaped the balance of power within the Pawar family and Maharashtra politics.


First, Eknath Shinde’s revolt in 2022 had rent the Shiv Sena asunder and triggered the collapse of Uddhav Thackeray’s MVA government – whose architect was Sharad Pawar. Then, Ajit Pawar’s defection further limited his room for manoeuvre.


Parth Pawar is young, clipped in speech, and (say those who watch him closely) more calculating than his occasional bursts of bluntness suggest. He first drew wider notice during the Sushant Singh Rajput case, when, despite being a part of the ruling MVA government (as the undivided NCP was allied to the MVA coalition), he demanded a Central Bureau of Investigation probe - an intervention that irked Sharad Pawar, who brusquely dismissed his grandson’s views in public.


Now, Parth has taken the oath as a member of the Rajya Sabha. The ceremony signalled that the next generation of Nationalist Congress Party leadership from Ajit Pawar’s branch has arrived on the national stage.


Chief Ministerial Ambition

For Sharad Pawar, two figures complicate his long-cherished ambition of seeing his daughter, Supriya Sule, ascend to Maharashtra’s Chief Ministership: Parth and Devendra Fadnavis.


Sule is an established parliamentarian, having repeatedly won Baramati and, in 2024, defeating her sister-in-law Sunetra Pawar in a bruising and emotive contest. Yet, success in national politics does not easily translate into dominance at the state level. To become CM, she would need to pivot decisively to Maharashtra’s rough-and-tumble assembly politics by winning over legislators, cadre and voters in a far more fragmented arena. Sharad Pawar knows the climb will be steep.


He also knows that Parth’s steady rise, especially if coupled with closer ties to Fadnavis and the BJP’s central leadership, could recreate a familiar problem. For years, Ajit Pawar’s proximity to the BJP and his command over the state apparatus had constrained Sule’s ascent. In Parth, some see the outline of a similar dynamic taking shape.


This outline has become sharper after Ajit Pawar’s tragic death in a plane crash near Baramati in January. Within days, Sunetra Pawar was elevated - first as leader of the NCP legislature party, then sworn in as Deputy Chief Minister. The speed of her ascent has discomfited Sharad Pawar.


She has begun, quietly but firmly, to consolidate control over her faction. A recent visit to Delhi - noticeably without senior leaders such as Praful Patel and Sunil Tatkare - hinted at a deliberate centralisation of authority, with Parth positioned as the key interlocutor with the BJP’s high command.


The generational shift is broader still. Sunetra’s younger son, Jay Pawar, has been inducted into the party’s top decision-making body. And when Parth took a swipe at the Congress during the Baramati bypoll by calling its decision to field a candidate the start of its “downfall,” Sharad Pawar issued a pointed rebuke, stressing the need for “maturity” in political commentary. It was a rare public dressing-down within a family accustomed to managing its differences behind closed doors. Sule, for her part, responded more gently, invoking the Congress’s long national role.


Even so, Sharad Pawar is hedging. He has been nurturing Rohit Pawar, a younger MLA who has consistently taken a hard line against Fadnavis, as a potential organisational counterweight - someone who could anchor Sule’s prospects within the state.


The result is a family divided by political strategy. On one side stand Sharad Pawar and Sule, aligned with the Opposition. On the other, Sunetra and Parth Pawar, embedded within the ruling establishment and building bridges with the BJP. For now, civility prevails.


But beneath it lies a contest that is at once personal and political: a struggle over succession, influence and Maharashtra’s most coveted office. With the patriarch ageing, time is not on anyone’s side.


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

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