Union finance minister Nirmala Sitharaman has backed the recently announced Merchant Discount Rate (MDR), saying that the mechanism will be imposed on operators and will not be passed on to customers. Addressing ongoing speculations around the charges, FM blamed the opposition for creating confusion and urged people to remain alert.Speaking to ANI, the finance minister said that she had already addressed the issue in Parliament, stressing that MDR is a charge between payment operators and will not be ‘burdened’ on UPI users.Sitharaman stressed that MDR is neither a tax nor a cess and that the money collected through it will not go into the Consolidated Fund of India.”It does not apply to transactions below Rs 2,000. It is neither a tax nor a cess; the funds will not be deposited into the Consolidated Fund of India. It is a charge levied by service providers to improve the system and provide better service, not for small transactions. Moreover, it is a charge between operators; it will not be passed on to the consumer. The burden does not fall on the customer,” she said.Sitharaman said she had given the same clarification earlier too, when the issue came up during the parliamentary session.“I provided a clarification on this very point when the issue was raised during the parliamentary session. Spreading misinformation, fueling debates based on it, and using that narrative to attack the government has become a habit for the opposition. This is wrong; there is an effort to spread misconceptions and mislead the public. The public needs to remain vigilant,” Sitharaman added.Meanwhile, Niti Aayog NITI Aayog vice chairman Ashok Kumar Lahiri had also backed the Centre’s decision to introduce a Merchant Discount Rate (MDR) on high-value UPI transactions, saying that businesses should find ways to sustain themselves instead of relying on government subsidies.Lahiri drew on the words of ancient philosopher Chanakya to make his point, saying a ruler should collect taxes from citizens as a bee collects honey from a flower — “gently, gradually, and without inflicting pain or bruising the petals”.“So you have to find ways of sustaining businesses without having to give subsidy,” Lahiri told reporters on the sidelines of an event.He clarified that the view was his personal opinion and did not represent NITI Aayog’s official position.The government has ruled out any rethink on the decision, with a senior official telling PTI, “There is no question of a re-think.”FM Sitharaman’s clarification comes after the National Payments Corporation of India (NPCI) introduced a new MDR framework on September 15. Under the framework, an MDR of 0.4 per cent will apply to Person-to-Merchant (P2M) UPI transactions above Rs 2,000, subject to a cap of Rs 300 per transaction.Consumers will continue to transact free of cost using UPI. The government has said that around 96 per cent of P2M transactions will remain unaffected, while the MDR will be distributed among payment ecosystem participants, including banks and payment application providers.
