Finance Minister Nirmala Sitharaman has rejected Congress leader Jairam Ramesh's claim that the proposed changes to the Payment and Settlement Systems Act, 2007 could eventually result in UPI users being charged for digital payments, calling the allegation a "canard" and asserting that no decision has yet been taken on introducing a Merchant Discount Rate (MDR).
Responding to a post by Ramesh on X, Sitharaman wrote, "Before spreading a canard, @Jairam_Ramesh ji, please consider this."
Before spreading a canard, @Jairam_Ramesh ji, please consider this:
— Nirmala Sitharaman (@nsitharaman) August 6, 2026
1. Merchant Discount Rate (MDR) applies only on the merchants and not on the end users/customers. It will support the Banks & Fintech to invest more on infrastructure, innovation & security. All users of UPI… https://t.co/sleUX4ztWe
The finance minister said MDR, if introduced, "applies only on the merchants and not on the end users/customers." She added that such a framework would enable banks and fintech firms to invest more in infrastructure, innovation and security, with UPI users ultimately benefiting from those investments.
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Sitharaman also clarified that the UPI and Services Steering Committee, headed by the National Payments Corporation of India (NPCI), has not yet taken any decision on MDR.
"More importantly, the UPI and Services Steering Committee headed by NPCI is yet to decide on the MDR. This will happen after Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026, which proposes to amend Section 10A of the Payment and Settlement Systems Act, 2007," she said.
Taking a swipe at the Opposition, Sitharaman added that the issue could have been debated in Parliament "if your party @INCIndia engages constructively in Parliament when the Bill was/is tabled. (sic)"
Her response came after Congress MP and party communications in-charge Jairam Ramesh alleged that the Taxation and Other Laws (Amendment) Bill, 2026 removes the statutory safeguard that has kept UPI transactions free of charges.
Sharing excerpts from the Bill on X, Ramesh said the amendment "eliminates the statutory guarantee that had so far kept UPI transactions fee-free" and "paves the way for imposing a merchant discount rate (MDR), which could easily be applied in the future to all types of digital payments."
"The burden of this will ultimately fall on ordinary people, who may now have to pay even for using UPI," he wrote.
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Ramesh also disputed the government's argument that MDR is necessary for the financial sustainability of UPI. He said the Reserve Bank of India (RBI) has sufficient resources to support the country's digital payments infrastructure without levying additional charges on merchants or consumers.
"The RBI had transferred a surplus of Rs 2.86 lakh crore to the Modi government in 2025-26. Just a small portion of this amount would be enough to support this vital digital public infrastructure," he said.
The Congress leader further claimed the proposed amendment follows criticism in the U.S. Trade Representative's 2026 report, which questioned the fee-free nature of UPI and RuPay and argued that it disadvantaged global payment companies such as Visa and Mastercard. He questioned whether the government was under pressure from the United States to open India's digital payments ecosystem to American firms.
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