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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.

SS (UBT) to rebels: No merger allowed

Mumbai: Setting the ball rolling for a legal battle, the Shiv Sena (UBT) has shot off missives to each of the six MPs who have announced allegiance to the Shiv Sena led by Deputy Chief Minister Eknath Shinde pointing that ‘no merger’ has been permitted as claimed.

 

Shiv Sena (UBT) Parliamentary Party (Lok Sabha) Leader and Mumbai South MP Arvind Sawant, has written the letters to six MPs - copies of which were also sent to Speaker Om Birla – which were released today, days ahead of the Monsoon Session of Parliament starting next week.

 

Responding to the move, Shinde said that “all laws and rules have been followed” after the six SS (UBT) MPs came to the Shiv Sena. He added: “What value has Sawant’s letter got?”

 

Merger of Senas

In the letters, Sawant said it had come to the knowledge of the SS (UBT) through reports in public domain that those MPs were attempting to portray that ‘there is a merger of the SS (UBT) with the Shiv Sena’ headed by Shinde.

 

“It is also learnt that you had approached the Speaker of the Lok Sabha, claiming that you have merged - or seeking recognition of this purported ‘merger’,” said Sawant in the letters.

 

“At the outset, it is made clear that SS (UBT), being the original political party, has neither initiated, agreed to, nor permitted any merger with the Shiv Sena headed by Eknath Shinde, or with any other political party whatsoever. This position has been categorically affirmed by Paksha Pramukh (Party President) Uddhav Thackeray,” he asserted.

 

Hence, in the absence of any merger of the original political party with any other political outfit, there was no question of any merger of the legislature party, Sawant pointed out. 

 

“Further no such merger is permissible or contemplated in law. Paragraph four of the Tenth Schedule to the Constitution of India merely affords the legislators an option to accept or reject a merger of the original political party; it does not confer upon the members of the legislature party any authority to themselves independently bring about, or effect, such a merger,” he said on the legal position.

 

SS (UBT) Tickets

Moreover, the six MPs were given tickets by SS (UBT), contested against Shiv Sena with the symbol, mandate and support of the SS (UBT) in the last Lok Sabha elections (2024).

 

Sawant reiterated that the SS (UBT) has already made a representation to the Speaker of Lok Sabha (on June 24) and urged that no request seeking recognition of any merger - or of any separate group - made by any Shiv Sena (UBT) MPs who were elected on the SS (UBT) symbol (Flaming Torch) should be entertained. 

 

“Pursuant thereto, the Speaker was pleased to afford an opportunity of hearing to the duly authorized representative of the party, which opportunity was availed. It is a matter of record that, thereafter, the Speaker has not passed any order recognizing any claim of merger,” Sawant stated.

 

A SS (UBT) leader said that this indicates the start of a legal battle between the party and the six rebels (out of the total 9 MPs) who quit the party for Shiv Sena on June 22.

 

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