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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.)

Tiger’s Expanding Shadow

Jun 30
3 min read

Mumbai: In the unforgiving theater of the state politics, symbolism is often the precursor to a tectonic shift. By masterminding the unexpected move to field Shiv Sena (UBT) MLC Sachin Ahir for the coveted post of Deputy Chairman of the Maharashtra Legislative Council, Deputy Chief Minister Eknath Shinde has done much more than simply poach a high-profile rival. He has sent an unequivocal message across the political spectrum: ‘Operation Tiger’ is far from over.


This aggressive expansion drive, initially aimed at consolidating Members of Parliament, is now systematically drilling down to legislators, municipal corporators, and the very grassroots foundation of the Uddhav Thackeray-led faction. However, while this tactical victory further decimates the opposition Maharashtra Vikas Aghadi (MVA), the collateral anxiety it has generated is being felt most acutely not within the UBT camp, but deep within the ranks of Shinde’s own senior ally, the Bharatiya Janata Party.


To understand the gravity of Shinde’s relentless political expansion, one must trace the genesis of his rebellion back to the very same upper house. It was the fateful MLC elections of 2022 where the then-ruling MVA suffered a humiliating defeat, losing a crucial seat to the opposition BJP. The blame for this cross-voting debacle was squarely placed on Eknath Shinde by the Uddhav Thackeray coterie. That slight became the catalyst for the most spectacular political coup in the state’s recent history.


A deeply hurt Shinde broke ranks, splintered the Shiv Sena, and ultimately brought the MVA government under Uddhav Thackeray crashing down. The BJP, still smarting from Thackeray’s 2019 decision to abandon their pre-poll alliance in favor of the Congress and the Nationalist Congress Party, not only fanned the flames of Shinde’s rebellion but actively bankrolled his ascent. In a move that stunned political pundits across the country, the BJP installed Shinde as the Chief Minister—an investment they believed would permanently relegate the Shiv Sena to a subservient, manageable role.


Political Emancipation

For the ordinary BJP worker on the ground, the splintering of the Shiv Sena felt like a long-awaited political emancipation. For decades, the BJP grassroots had harbored a deep-seated grievance of being forced to play second fiddle to a domineering regional partner. The vertical split engineered by Shinde relieved that historical pressure. This newfound dominance was brilliantly cemented in the 2024 state assembly elections, where the BJP delivered a spectacular standalone performance, sending a record-breaking 132 legislators to the lower house. For the first time in the truest sense, the common BJP party worker tasted the unadulterated fruits of absolute political hegemony. They were the undisputed big brothers of the ruling Mahayuti alliance, dictating terms and driving the state’s overarching political narrative.


But Shinde’s surprise gambit with Sachin Ahir has violently disrupted this comfortable status quo. It confirms that he is not content merely surviving as a BJP-propped proxy. Under his astute leadership, his faction of the Shiv Sena has steadily mutated into a formidable political machine in its own right. By persistently absorbing the residual strength of the UBT faction, Shinde is systematically rebuilding the undivided Shiv Sena’s original architecture, just with a different captain at the helm. Operation Tiger is clearly no longer just about numerical survival; it is a meticulously planned project for absolute resurrection.


Palpable Sense

This relentless consolidation has triggered a palpable sense of dread among the BJP foot soldiers. The murmurs on the ground are increasingly anxious, painting a picture of an alliance marked by silent internal friction. If Shinde continues to successfully woo the remaining legislators, corporators, and shakha pramukhs from the Thackeray camp, his Sena could very well regain the organizational muscle and street-level dominance of the undivided era. The BJP leadership’s short-term strategy to use Shinde to annihilate the Thackerays might inadvertently breed a political behemoth they can no longer control.


For the seasoned BJP cadre, the impending power dynamics within the Mahayuti combine look increasingly precarious.


The immediate goal of keeping the MVA out of power is being achieved, but they are now questioning at what cost to the BJP’s own regional supremacy. As Eknath Shinde’s political stature grows by the day, the fundamental question haunting the local BJP karyakarta is no longer about today’s legislative arithmetic. It is an existential apprehension looking toward the future: If Shinde succeeds in wholly appropriating the legacy, cadre, and strength of the original Shiv Sena, the BJP may find itself right back where it started by the 2029 elections—forced, once again, to play the reluctant junior partner in its own political backyard.


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