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NITI Aayog Vice Chairman Ashok Kumar Lahiri on Wednesday defended the government’s decision to impose merchant charge on UPI transactions saying that the government has to find ways of sustaining businesses without having to give subsidy.
Quoting ancient Indian teacher and philosopher Chanakya, who had said a ruler should collect taxes from citizens just as a bee collects honey from a flower – gently, gradually, and without inflicting pain or bruising the petals, Lahiri said, ”so you have to find ways of sustaining businesses without having to give subsidy.” ”Look at the numbers that is for ₹100. You pay 40 paise for transaction worth ₹100. That also on big transactions…Is that going to kill you? No, but you need to run businesses on a self-sustainable basis,” Lahiri told reporters on the sidelines on an event.
Ending nearly six years of fully free UPI payments, the government on Tuesday introduced a 0.4% fee on transfers worth more than ₹2,000 made to merchants through UPI from October 15 while explicitly ring-fencing everyday person-to-person transactions as well as small payments from any charge.
”You will get used to it. For example, cheque books – when you take from banks, you pay a small amount for it. Does it pinch? It’s part of the business,” he explained.
The decision to impose MDR has evoked strong opposition from several quarters including traders, shopkeepers and political parties who dubbed the move as ’Modi Tax’.
Government sources on Wednesday said the decision to impose MDR was taken in the larger interest of the UPI ecosystem and to strengthen its safety and security.
Quoting ancient Indian teacher and philosopher Chanakya, who had said a ruler should collect taxes from citizens just as a bee collects honey from a flower – gently, gradually, and without inflicting pain or bruising the petals, Lahiri said, ”so you have to find ways of sustaining businesses without having to give subsidy.” ”Look at the numbers that is for ₹100. You pay 40 paise for transaction worth ₹100. That also on big transactions…Is that going to kill you? No, but you need to run businesses on a self-sustainable basis,” Lahiri told reporters on the sidelines on an event.
Ending nearly six years of fully free UPI payments, the government on Tuesday introduced a 0.4% fee on transfers worth more than ₹2,000 made to merchants through UPI from October 15 while explicitly ring-fencing everyday person-to-person transactions as well as small payments from any charge.
”You will get used to it. For example, cheque books – when you take from banks, you pay a small amount for it. Does it pinch? It’s part of the business,” he explained.
The decision to impose MDR has evoked strong opposition from several quarters including traders, shopkeepers and political parties who dubbed the move as ’Modi Tax’.
Government sources on Wednesday said the decision to impose MDR was taken in the larger interest of the UPI ecosystem and to strengthen its safety and security.
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