NEW DELHI: NITI Aayog vice chairman Ashok Kumar Lahiri on Wednesday defended the Centre’s decision to introduce a Merchant Discount Rate (MDR) on high-value UPI transactions, saying businesses must find ways to become self-sustaining rather than depend on government subsidies.Quoting ancient Indian teacher and philosopher Chanakya, Lahiri said a ruler should collect taxes from citizens as a bee collects honey from a flower — “gently, gradually, and without inflicting pain or bruising the petals”.“So you have to find ways of sustaining businesses without having to give subsidy,” Lahiri told reporters on the sidelines of an event, clarifying that this was his personal view and not NITI Aayog’s official position.The remarks came a day after the government announced that a 0.4 per cent MDR would apply from October 15 to UPI payments of more than Rs 2,000 made to merchants. Person-to-person transactions and small merchant payments will remain outside the levy.Lahiri sought to put the proposed charge in perspective, saying the impact on individual transactions would be limited.“Look at the numbers that is for Rs 100. You pay 40 paise for transaction worth Rs 100. That also on big transactions… Is that going to kill you? No, but you need to run businesses on a self-sustainable basis,” he said.He also compared the proposed charge with other banking services.“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,” Lahiri said.The move has drawn opposition from traders, shopkeepers and political parties, with critics referring to the proposed levy as a ‘Modi Tax’.Congress leader and Leader of Opposition in the Lok Sabha Rahul Gandhi on Wednesday alleged that Prime Minister Narendra Modi had given in to US pressure over the change.“Modi ji has a completely different concept. He’s neither left nor right; he has decided to lie down straight and prostrate himself in front of Donald Trump,” Gandhi said in a video message posted on X.“He’s put a tax on every single Indian person by taxing UPI and giving a huge amount of money to the United States. Modi ji, please stop lying down in front of the United States. Have a spine, stand up and take back the UPI tax,” he added.The Congress has alleged that the government acted on a US demand to end the zero-MDR regime. The party also took a swipe at Modi, saying he had “redefined NOTA — Narendra’s Ongoing Trump Appeasement”.The finance ministry had earlier rejected the allegation of foreign influence, saying India’s UPI policy decisions were being made independently.“Some claims suggest the change is due to foreign influence. This is false. India’s UPI policy decisions are made independently, with the clear goal of building a self-sustaining, inclusive, and affordable digital payments ecosystem,” it said in a post on X.
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Government sources told news agency PTI that the MDR decision was taken in the larger interest of the UPI ecosystem and to strengthen its safety and security, and it cannot be rolled back. ‘When decision has been taken, question of its rollback doesn’t arise’, he said.The proposed 0.4 per cent MDR will be paid by merchants and capped at Rs 300 for transactions of Rs 75,000 or more. The government has ruled out a rethink, with a senior official telling PTI, “There is no question of a re-think.”The new regime is scheduled to take effect from October 15.