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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.)

The Angry Young Man of Congress

Writer: Abhijit Mulye
Abhijit Mulye
Oct 20, 2024
2 min read

Updated: Oct 21, 2024

The Angry Young Man of Congress

Maharashtra Pradesh Congress Committee President Nana Patole has hit the headlines yet again. Generally, whenever he is in headlines, he is angry and is mad at someone. The difference this time was that he angered Shiv Sena MP and spokesperson Sanjay Raut so much, so that Raut went mad at Nana asking the Congress leadership to keep Patole away from seat sharing talks.


However, this is not the first time that they both have locked horns. In 2021, the year when Patole was made the MPCC Chief by the party leadership, he had hit headlines by stating that his party shall contest the next elections on its own and shall have a Congress worker as a Chief Minister. Raut, who is also the Executive Editor of his party’s mouthpiece Saamna, had written an editorial saying that Patole was overconfident when he made the statement about the power of the Congress in the state.


Patole is accused of being authoritarian and several leaders in the state Congress have raised complained against him with the party high command over past four years. Yet, he enjoys the confidence of the party high command who haven’t moved him away from the post. Probably the reason for that Patole’s grass root connect and that he had been a staunch Congress loyalist though he spent a few years in the BJP and hit national headlines by speaking against PM Narendra Modi when none dared to do so.


Nana, who belongs to agrarian Kunbi community from Suki village of Sakoli taluka of Bhandara district, had a humble start in the Zilla Parishad in 1990 as a Congress member. After the formation of the Nationalist Congress Party (NCP) his arch rival within the party, Praful Patel, went away making way for Nana’s ambition to become an MLA. After becoming MLA twice, in 1999 and 2004, Patole’s ambitions grew. However, he realised that he has little space in the state politics since the Congress and the NCP were in alliance and Patel was taking all the shots as far his home district was concerned. He then switched to BJP and got elected to the parliament in 2014. However, there too he realized that he stands little scope and he started criticising the top leadership of the party before quitting it in 2017.


Though he couldn’t keep his home turf in the bypolls, he won the assembly elections. He was made the Speaker of the assembly in 2019. He distasted the position and resigned from the post to join active politics in 2021, since when he is the MPCC president.


Under Patole’s leadership the party’s performance has been the best compared to past decade, and probably that is the reason why he appears to be the most favoured by the party high command. Even though differences with the Shiv Sena (UBT) over seat sharing are settled as of now, he is unlikely to dilute his stand and let anyone get bigger share of seats in Vidarbha, which is his best bet as of now.

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