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Correspondent

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.

The New PG Playbook

Last month, the University Grants Commission (UGC) issued a landmark circular that promises to transform the postgraduate education landscape in India. By allowing Higher Education Institutions (HEIs) already approved for two-year Open and Distance Learning (ODL) and Online postgraduate (PG) programmes to offer a one-year version in the same discipline, the UGC operationalized a major vision outlined in the National Education Policy (NEP) 2020.


For students holding a four-year bachelor’s degree with Honours, this creates a direct, accelerated one-year route to a master’s degree via online or distance modes. While framed around flexibility and student choice, this reform prompts a deeper question: how should 21st-century India balance depth, speed and access in higher education?


Structural Safeguards

This shift originates in NEP 2020’s framework of flexible entry and exit points, seamless credit mobility and international academic alignment. The policy established that a four-year undergraduate degree with research or Honours should be considered equivalent to the traditional three-year degree plus additional coursework for pursuing advanced studies. The UGC’s directive gives structural backing to this equivalence within the ODL and online sectors.


Crucially, this is not an open permission. Institutions may only offer the one-year postgraduate option if they already maintain an approved two-year programme in that subject. Furthermore, the curriculum, credit system, assessment rigor and instructional material must strictly adhere to UGC guidelines and institutional approvals. Admission remains restricted to four-year Honours graduates, while professional degrees like the MBA or MCA must continue meeting their respective regulatory criteria. Thus, the framework acts as a targeted parallel track rather than a dilution of academic standards.


The advantages of this policy shift are considerable, particularly in a developing economy where time and financial constraints often determine educational outcomes.


First, reducing postgraduate duration directly lowers tuition costs and living expenses. For a working professional or student balancing household budgets, entering the job market or qualifying for doctoral research a year earlier makes a meaningful impact on career trajectories. Second, it brings Indian qualifications closer to global norms. One-year master’s degrees are standard across Europe, the United States, Australia and parts of Asia, and this change eliminates credit transfer hurdles for Indian graduates seeking global academic or employment opportunities.


Third, it harnesses online and distance learning formats to expand opportunities across underserved regions where physical postgraduate seats are scarce and migration costs are prohibitive. Finally, it provides a tangible reward for students who opted for four-year multidisciplinary undergraduate degrees, reinforcing the incentive to pursue specialized academic depth early on.


Operational Risks

However, translating policy into practice introduces operational challenges. The primary concern revolves around quality assurance. Compressing a postgraduate curriculum into a single year, even with equivalent credit requirements demands intensive academic focus from both educators and learners. In distance and online learning, where independent study dominates, there is a distinct danger of turning advanced degrees into mere module-checking exercises. To prevent this, institutions must invest in rich digital resources, active mentorship and secure evaluation systems.


A second obstacle involves public perception and institutional acceptance. Traditional employers, particularly within state agencies and conservative industries, long equate a two-year master's with comprehensive capability. Academic circles may similarly question whether a twelve-month framework provides sufficient time for specialized research and practical skill acquisition. While the UGC circular limits entry to four-year Honours graduates, communicating this distinction to recruiters and international universities requires active, transparent outreach to ensure the degree is viewed as accelerated rather than shortened.


Finally, professional degrees governed by specialized bodies like the AICTE must carefully align internship and accreditation requirements so that graduates face no disadvantage during recruitment drives.


Addressing these challenges requires building a supportive institutional ecosystem around the new model. Universities should publish detailed credit frameworks demonstrating how the accelerated curriculum corresponds to two-year standards, incorporating capstone projects or research modules to maintain analytical depth. Quality assurance bodies like NAAC and the UGC should make evaluation criteria for online programmes transparent, helping candidates make informed decisions.


Simultaneously, recruitment regulations across public and private sectors must explicitly recognize a one-year postgraduate degree following a four-year undergraduate degree as fully equivalent to traditional qualifications.


The UGC’s circular represents a vital step toward modernizing Indian postgraduate education. Executed with institutional discipline and rigorous oversight, it offers a powerful mechanism for social mobility, financial relief, and global integration. On the other hand, its superficial implementation may reduce high-level education to paper credentials.


(The writer is a former college Principal and Founder of Supporting Shoulders, an Odisha-based non-profit Trust. Views personal.)

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