MDR on UPI: 'Unanimous report was submitted,' says Parl finance panel chief on Manish Tewari's claims

A fresh political row has broken out over recommendations linked to the Merchant Discount Rate (MDR), with Parliamentary Standing Committee on Finance chairman and BJP MP Bhartruhari Mahtab defending the panel's report and Congress MP Manish Tewari rejecting claims that Opposition members supported the proposal, according to ANI.

Mahtab said the committee's report on the Demands for Grants was adopted unanimously after due procedure. Tewari, however, said the committee had only recommended that the government 'explore' a possible revenue model and that the current proposal to levy a transaction fee or MDR on UPI and other digital payments never came before the committee after that stage.

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Mahtab defends committee process

Responding to Tewari's objection to reports that 'certain members' of the Opposition supported the proposal on MDR, Mahtab said the committee follows a structured process of discussion, preparation and adoption of reports.

"The Parliamentary Standing Committee has a process of adoption of report after due discussion relating to the Demands for Grants. Questions were sent to the department; they gave written answers. On the basis of that, a draft report was prepared, circulated and subsequently adopted in the committee. I believe it was a unanimous report that was submitted to Parliament. Everything is on record," Mahtab said on Friday.

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Tewari rejects claim on Opposition support

His remarks came after Tewari, in a post on X on Friday, rejected claims that Opposition members supported the proposal to introduce MDR on digital payments.

"My attention has been drawn to some reports attributed to the Chairperson of the Parliamentary Standing Committee of Finance, Bhartruhari Mahtab, that 'certain members' of the Opposition supported the proposal to 'Merchant Discount Rate- MDR'. With great respect, this is both erroneous and fallacious and therefore facetious," Tewari said.

Tewari said the committee's recommendation, while examining and reporting on the Demands for Grants of the Department of Financial Services for FY 2026-27 on March 12, 2026, was limited to exploring a possible revenue model.

"The Committee recommend that while the proposed 3-year multi-year scheme and cash back components are necessary to democratise digital payments in untapped Tier 3-6 cities, the Department of Financial Services must concurrently explore a self-reliant, tiered revenue model," Tewari said, highlighting the word "explore".

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Reference to Action Taken Report

He further referred to the government's reply on the Action Taken Report on the observations and recommendations contained in the Thirty-Second Report of the Standing Committee on Finance on 'Demands for Grants (2026-27)' of the Ministry of Finance (Department of Financial Services), which was laid on the floor of the Lok Sabha on August 12, 2026.

Quoting the government's response, Tewari said, "Given the sustainability of the UPI ecosystem and the burden on the Government exchequer, the Department is currently exploring two options: (i) Examining the feasibility of restoring MDR for certain high threshold transactions/ merchants; and (ii) a tiered incentive structure to phase out the Government support in the next few years."

"The key words are currently exploring," Tewari added.

He further claimed that the proposal to levy a transaction fee or MDR on UPI and other digital payments was not discussed before the committee after that stage.

"The current proposal to levy a Transaction fee or MDR on UPI and other digital payments never came before the committee thereafter," Tewari said. "To suggest 'certain members' of the opposition supported the proposal by not dissenting is both unfounded and unfortunate and therefore incorrect," he added.

New UPI MDR framework

On September 15, the National Payments Corporation of India introduced a new Merchant Discount Rate framework under which select UPI merchant transactions above ₹2,000 will attract an MDR of 0.4 per cent. Consumers, however, will continue to use UPI without any charge.

The revised framework will take effect from October 15 and will cover only select merchant transactions. Under it, Person-to-Merchant UPI transactions above ₹2,000 will attract an MDR of 0.4 per cent, capped at ₹300 per transaction.