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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.)

Small Businesses, Big Challenges

Nov 27, 2025
3 min read

Despite driving nearly 30 per cent of India’s GDP, many MSMEs still struggle with the basics of workforce management.

Micro, Small and Medium Enterprises (MSMEs) are the backbone of the Indian economy, contributing nearly 30 per cent to the GDP and employing over 110 million people across sectors. They remain the foundation of India’s industrial growth, supporting both local and export markets. Yet, despite their scale and significance, many MSMEs continue to struggle with effective workforce management.


Several factors act as roadblocks for MSMEs in managing their workforce effectively. These challenges can be understood more clearly when examined one by one:


1. Employer/Owner Mindset: Leadership plays a pivotal role in any company. In many MSMEs, founders take on multiple responsibilities, leaving little time for people management or business development. Most decisions rest solely with the founder. While this approach may work in the early stages, it becomes increasingly unsustainable as the organisation grows. Employees often feel constrained by such micromanagement, as they must seek the owner’s approval for even routine matters, eventually prompting many of them to leave.


Another reality is that, because owners shoulder multiple roles, they often feel overburdened and admit that they rarely find the time to think about broader business strategies.


2. Attracting the right talent: Attracting the right talent is a persistent challenge for many MSMEs, as larger organisations offer better salaries, benefits, and growth opportunities. Younger professionals, in particular, tend to prefer the stability and recognition associated with big brands.


In many MSMEs, recruitment is driven by referrals rather than a well-defined process. At times, budget constraints lead employers to compromise on candidates’ qualifications and experience. However, without the capacity to provide adequate training or feedback, the mismatch in skills only widens. This ultimately creates frustration for both the employer and the employee.


3. Retaining the right people: Once an employee is hired, retaining them becomes another challenge. Without a clear job description, employees are often expected to handle multiple tasks without proper feedback, leading to role confusion. This lack of clarity, coupled with limited motivation, recognition, or a defined career path, frequently results in burnout and, ultimately, resignation.


In the absence of structured policies and processes, owners tend to focus heavily on operations, delivery, and customer satisfaction, leaving little room for people development, feedback, or recognition.


4. Lack of Performance Appraisal: In the absence of proper job descriptions, the performance appraisal process is often poorly defined. Assessments tend to rely on subjective impressions rather than objective data. As a result, employees may feel they are not being fairly rewarded for the work and effort they put in. This dissatisfaction frequently prompts them to resign in search of better opportunities and recognition.


Some owners also acknowledge that they are not fully aware of the contributions their employees make, which further complicates the appraisal process.


5. Lack of Training or Skill Upgrade: Although training is an investment, some companies view it merely as an expense. Owing to limited budgets and time constraints, they often avoid providing training to their employees. Another challenge is the absence of a fully fledged HR department, and many MSMEs are also unaware of government-sponsored training schemes available to the sector.


What employees really want

According to a survey conducted by Randstad in March 2025, employees want:

• Work–life balance – Employees prioritise flexibility and a healthy balance between their personal and professional lives.

• Training and growth – Opportunities for career development, training, and upskilling are highly valued.

• Purpose and values – Employees seek roles that align with their personal values and life goals.

• Salary – This ranks as the fourth priority.


Improving the existing system does not require a large budget. Clearly defining job responsibilities, providing timely feedback, and communicating expectations to employees can significantly enhance overall performance. By doing so, owners can free up their time to focus on business strategy and scale their operations more effectively.


(The writer has experience of over three decades in HR from diverse industries. He helps MSME and SME organisations to scale up their business.)

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