‘Why is Rahul opposing?’ Govt functionary says Chidambaram, 4 other Congress MPs backed UPI revenue framework

After Congress MP Rahul Gandhi trained his guns at the Modi government, demanding an immediate rollback of the new UPI fee rule, the Centre hit back by citing a parliamentary panel's recommendation on a tiered revenue framework, reportedly backed by five Congress MPs, including former finance minister P Chidambaram.

A senior government functionary said the Parliamentary Standing Committee on Finance had recommended introducing a tiered Merchant Discount Rate (MDR) for UPI transactions and called for the framework to be implemented without delay.

According to news agency PTI, the functionary said five Congress MPs — P Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K Gopinath — were present when the panel adopted its report on August 12.

No dissent was recorded in the published minutes, the functionary claimed.

Govt questions Rahul Gandhi's opposition

The government questioned why Gandhi was opposing a revenue framework that Congress members of the parliamentary panel had supported.

"Why is Rahul Gandhi opposing something his own MPs including former finance minister P Chidambaram and former minister in the UPA government Manish Tewari supported within the parliamentary panel," the functionary asked.

The remarks came after Gandhi criticised the government's decision to levy a fee on UPI payments to merchants above ₹2,000. The Leader of Opposition in the Lok Sabha alleged that Prime Minister Narendra Modi had decided to "prostrate" before US President Donald Trump and give a huge amount of money to America.

Gandhi also demanded that the government roll back the decision.

What the parliamentary panel recommended

The Parliamentary Standing Committee on Finance, headed by BJP MP Bhartruhari Mahtab, pressed for a tiered MDR and revenue framework for UPI, recommending that it be notified and operationalised without delay, according to the government functionary, cited by PTI.

The committee's report reiterated its earlier recommendation on establishing a viable revenue model for UPI. It noted that legislative-enabling provisions for a tiered MDR structure had been brought forward, highlighting the need for a sustainable framework.

The report also referred to a ₹2,000 crore budgetary allocation for 2026-27 to offset ecosystem costs arising from the zero-MDR policy on RuPay and low-value UPI transactions.

"The Committee would like to emphasize that establishing a viable revenue mechanism is critical to ensuring the UPI ecosystem achieves financial sustainability without perpetually straining the Government exchequer," the report said.

The panel further noted that UPI could process up to 150 billion transactions per month and add 600 million new users. However, it said the current government incentive covered only 11% of the industry's actual costs and 14% of potential MDR collections, creating a structural funding gap that could affect long-term infrastructure investment.

Govt on who will pay UPI fee

The government has said the revised UPI framework will not affect person-to-person transactions, which will remain free regardless of the amount transferred.

Payments to merchants up to ₹2,000, along with transactions covered under the zero-MDR framework for small merchants, will also continue to be free.

"Consequently, approximately 96 per cent of all P2M transactions will remain unaffected. MDR will apply only to specified merchant transactions above ₹2,000," the finance ministry said on Tuesday.

The government also clarified that MDR is neither a tax nor a charge collected by the government or the National Payments Corporation of India (NPCI). Instead, the fee is distributed among payment ecosystem participants, including banks and payment application providers, to support the operation and continued expansion of the UPI ecosystem.