The government has clarified that the charges imposed on UPI transactions apply to merchants and not directly to customers. However, citizens have expressed concerns that merchants may recover the additional cost from customers through other means or may refuse digital payments altogether.
Reacting to the issue, Raj Thackeray said in a social media post that the Centre had imposed a “digital trap” on Indians, including both merchants and consumers, through the Merchant Discount Rate (MDR), or charges on UPI transactions, though not uniformly across all transactions.
“After first introducing demonetisation, the government brought in the UPI system while showcasing how it was promoting digital transactions. It then publicised it, praised itself, and got people accustomed to it, only to suddenly announce one day that these transactions would now attract charges,” Raj Thackeray said.
“In short, citizens were kept distracted and quietly caught in a ‘digital trap’. I have been saying for years that people should not remain complacent or assume that everything is fine and going smoothly. Someday, this government will come knocking at your doors. And that beginning has now happened,” he added.
Raj Thackeray further questioned the government’s planning behind the introduction of UPI and the funding of its long-term operations.
“The government introduced the UPI system for digital transactions. It ensured that it would receive a response, and it did receive one. All that is fine. But if the intention behind introducing digital payment infrastructure was genuinely to make financial transactions easier, then when the infrastructure was being developed, why was there no provision to ensure that it could continue operating without affecting the pockets of ordinary people?” he asked.
He also questioned why permanent budgetary provisions had not been made for the long-term maintenance of such payment systems and cybersecurity.
“Such payment systems will require money for long-term maintenance as well as cybersecurity. Then why was permanent provision for this not made in the budget?” Raj Thackeray said.
He questioned the proposed 0.4% MDR on purchases above Rs 2,000 and challenged the government’s assurance that merchants would bear the cost.
“Customers make purchases of more than Rs 2,000 and a 0.4% MDR will apply? The government says that merchants will bear this burden. What guarantee is there that merchants will bear it and not pass it on to customers? Does the government have any mechanism for this? The answer is absolutely ‘no’,” he said.
Raj Thackeray also criticised the imposition of GST on the MDR, making a sarcastic reference to the government’s taxation policies.
“Again, the current finance minister cannot impose 18% GST on breathing because it is not possible, otherwise she would impose it on that too. Therefore, they have imposed GST on this MDR as well. In short, they are reaching into citizens’ pockets wherever they can,” he said.
He also referred to Prime Minister Narendra Modi’s promotion of UPI abroad and questioned whether the Prime Minister would similarly discuss the imposition of MDR and GST during future foreign visits.
“Prime Minister Modi would travel abroad and promote UPI and pat himself on the back. Now, when he travels abroad again, will he also laugh and tell people how I imposed MDR and GST?” Raj Thackeray said.
Raj Thackeray also referred to the Congress party’s allegation that the decision was taken under pressure from the American government, while making it clear that he did not know whether that allegation was true.
“The Congress party has alleged that all this was done under pressure from the American government. I do not know about that. But can the Central Government firmly say that, while taking this decision, it did not consult anyone, or that foreign card companies and the global payment system were not uncomfortable with it? The answer is no,” he said.
Raj Thackeray further alleged that if there was pressure on the government from somewhere, it had used the situation to increase its own revenue.
“If there was pressure on the government from somewhere, it used that to fill its own treasury,” he said.
He stressed that the issue was not about the amount being charged but about what he described as the government’s intent.
“The question is not about four paise or forty rupees. The question is about the government’s intent. Whether it was demonetisation or digital payment transactions, the government’s intentions have never appeared clean,” Raj Thackeray said.
He argued that the question of who would bear the cost of operating UPI should have been addressed when the system was being created.
“Who will bear the cost of running UPI should have been considered when the system was being established. That was not done, or perhaps it had already been decided that it would not be done,” he said.
Raj Thackeray also referred to the Finance Ministry’s position in 2022, saying that the ministry had clearly stated its position at the time.
“The Finance Ministry had clearly said this in 2022. But while saying this, as I mentioned, it had also been decided when to put a hand into your pockets,” he said.
He further urged the government not to use what he described as arguments that charges were not being imposed on transactions between two individuals.
“The government should not make such absurd arguments that we are not charging fees on transactions between two people. You have created a digital trap and every Indian is now caught in it,” Raj Thackeray said.
The Maharashtra Navnirman Sena (MNS) has opposed the MDR and called on merchants to refuse to bear the charge.
“The Maharashtra Navnirman Sena registers its protest against this MDR. Merchants should outright oppose paying this charge,” Raj Thackeray said.
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