Nirmala Sitharaman rebuts Jairam Ramesh over UPI Bill, says MDR will not apply to customers

Finance Minister Nirmala Sitharaman rejected Congress leader Jairam Ramesh's criticism of the UPI amendment Bill, saying Merchant Discount Rate applies only to merchants. She accused the Congress of avoiding parliamentary debate, while Ramesh maintained the changes could eventually lead to charges on digital payments.

New Delhi: Finance Minister Nirmala Sitharaman on Thursday hit back at senior Congress leader Jairam Ramesh over his criticism of the Taxation and Other Laws (Amendment) Bill, 2026, saying he should refrain from “spreading a canard” about the proposed changes related to UPI transactions.

Responding to Ramesh’s allegations, FM Sitharaman clarified that Merchant Discount Rate (MDR) applies only to merchants and not to end users or customers.

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The minister said the move would enable banks and fintech companies to invest more in infrastructure, innovation and security, with all UPI users ultimately benefiting from these investments.

“Before spreading a canard, Jairam Ramesh, please consider this:

1. Merchant Discount Rate (MDR) applies only on the merchants and not on the end users/customers. It will support the Banks & Fintech to invest more on infrastructure, innovation & security. All users of UPI will reap the benefits of this investment,” FM Sitharaman stated.

FM Sitharaman also criticised the Congress for raising the issue outside Parliament instead of debating it during the legislative process. The minister said the matter could have been discussed on the floor of the House if the party had engaged constructively when the Bill was tabled in the Lok Sabha and Rajya Sabha.

“All this could have been discussed on the floor of the House if your party engages constructively in Parliament when the Bill was/is tabled,” FM Sitharaman added.

Earlier, Jairam Ramesh had alleged that the proposed amendment removes the statutory guarantee that has kept UPI transactions free of charges, thereby opening the door for the future imposition of MDR on digital payments. He claimed that any such levy would ultimately be passed on to ordinary users.

The Congress leader also rejected the government’s argument that charging MDR is necessary to make UPI financially sustainable.

He argued that the Reserve Bank of India has adequate financial resources to support the country’s digital payments infrastructure without imposing any additional burden on merchants or consumers, citing the RBI’s surplus transfer of Rs 2.86 lakh crore to the Centre in 2025-26.