UPI MDR Row: Congress MPs Deny Backing Fee Proposal, Dispute Government’s Claim

Congress MPs Gaurav Gogoi and Manish Tewari have rejected claims that members of the party backed the government’s proposed Merchant Discount Rate (MDR) framework for UPI transactions, saying no specific proposal on the fee was presented before the Parliamentary Standing Committee on Finance.

The dispute erupted after a government functionary claimed that five Congress MPs, including former finance minister P Chidambaram, had supported a tiered MDR framework during a parliamentary panel meeting.

Congress MPs Say No Specific UPI Fee Proposal Was Discussed

Gaurav Gogoi said the Department of Finance did not place any specific proposal concerning a “UPI tax” before the committee when its representatives met the panel.

According to Gogoi, committee members did raise questions about the need for MDR, but government representatives did not provide specific or satisfactory answers at that stage.

Manish Tewari also disputed the government’s account, arguing that there had been no detailed proposal before the committee specifying the MDR rate, amount, ceiling or exemptions.

Tewari further accused the government of using proceedings of Parliamentary Standing Committees for political messaging.

He said the panel had discussed the concept and raised questions about the need and effectiveness of MDR, but no concrete proposal to impose a particular fee from October 15 was placed before it.

The controversy followed remarks by a government functionary who said five Congress MPs—P Chidambaram, Manish Tewari, Gaurav Gogoi, Kishori Lal and K Gopinath—were present when the committee report was adopted on August 12.

The official reportedly pointed out that no dissent was recorded in the published minutes and questioned why Rahul Gandhi was opposing the UPI framework if Congress MPs had supported it at the parliamentary panel level.

Congress MPs, however, have disputed the interpretation of the committee proceedings, maintaining that discussion of MDR in principle should not be treated as approval of a specific fee structure.

Rahul Gandhi Demands Rollback

The issue has also triggered a political exchange between the government and the Congress.

Leader of Opposition in the Lok Sabha Rahul Gandhi has criticised the decision to introduce an MDR on certain UPI merchant transactions and demanded that it be withdrawn.

Gandhi alleged that the policy would benefit US-based payment companies and accused Prime Minister Narendra Modi of yielding to pressure from US President Donald Trump. These are Gandhi’s political allegations and have been disputed by the government.

Under the government notification cited in the report, a 0.4 per cent MDR will apply to person-to-merchant UPI transactions above ₹2,000 from October 15.

UPI payments of up to ₹2,000 will remain outside the MDR framework.

The charge will apply to merchant transactions rather than person-to-person transfers between individuals.

The notification also specifies that recurring UPI payments—such as utility bills, OTT subscriptions and mutual fund instalments—will not automatically attract the 0.4 per cent MDR simply because the transaction amount exceeds ₹2,000.

The latest controversy therefore centres on two separate issues: the government’s implementation of the new MDR framework and the disagreement over whether Congress members of the Finance Committee had previously supported such a proposal.