NITI Aayog Vice Chairman Ashok Kumar Lahiri on Wednesday defended the government’s decision to impose a merchant discount rate (MDR) on UPI transactions, saying businesses need to find ways to remain sustainable without depending on subsidies, according to PTI.
Lahiri cited ancient Indian teacher and philosopher Chanakya, who had said a ruler should collect taxes from citizens like a bee collects honey from a flower — gently, gradually and without causing pain or damaging the petals.
Also read: UPI transactions above Rs 2,000 to attract 0.4% MDR; check key details
"So you have to find ways of sustaining businesses without having to give subsidy," Lahiri told reporters on the sidelines of an event.
The government on Tuesday announced a 0.4 per cent fee on UPI transactions above Rs 2,000 made to merchants, effective October 15, ending nearly six years of completely free UPI payments. Person-to-person transactions and small-value payments have been kept outside the scope of the 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," Lahiri said.
Explaining the impact of the charge, he said, "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."
The decision to introduce MDR has drawn opposition from traders, shopkeepers and political parties, which have termed the move as a 'Modi Tax'.
Government sources told PTI the MDR was introduced in the larger interest of the UPI ecosystem and to strengthen its safety and security.
With inputs from PTI
