Finance Committee Calls for Immediate Implementation of Tiered Revenue Framework

The Standing Committee on Financial Services, which includes former finance minister P. Chidambaram and ex‑minister Manish Tiwari, submitted a report on August 12 urging the swift adoption of a tiered merchant discount rate (MDR) for the Unified Payments Interface (UPI).

The committee highlighted that a viable, multi‑level revenue mechanism is critical to ensure the fiscal stability of the UPI ecosystem and to keep the central exchequer from bearing recurring costs. It recommended that the Department of Financial Services publish the MDR structure promptly and enforce it across all payment service providers.

A three‑year cashback initiative targeting tier‑3 to tier‑6 cities was also proposed to expand digital payment adoption. However, the committee stressed that this should be complemented by an autonomous, tier‑based revenue model to fund essential security and infrastructure upgrades.

Opposition leader Rahul Gandhi has objected to the government’s plan to levy a fee on UPI transactions above ₹2,000, accusing the move of being unfavorable to small traders. In response, the Congress party’s five MPs present in Parliament backed the committee’s recommendations, asserting that the tiered MDR is a balanced approach that protects both merchants and the broader digital economy.

NDA spokespersons rejected Gandhi’s claim that the policy was driven by U.S. pressure, labeling it as unfounded. Union Minister Ramdas Athawale affirmed the fairness of the decision and its neutrality toward small businesses.