Oppn Lacks Understanding of MDR, Says Nirmala Sitharaman

In Short

The finance minister said the Opposition was “searching for issues” and making allegations without fully understanding the matter.

Finance Minister Nirmala Sitharaman
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Finance Minister Nirmala Sitharaman

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As the date for implementing the decision to levy 0.4 per cent Merchant Discount Rate (MDR) on specified UPI transactions above Rs 2,000 is fast approaching, the Union Finance Minister Nirmala Sitharaman sought to rubbish the opposition claim that the government had succumbed to external pressures.

She said, it is "Absolutely baseless. It was a professional decision by the payment ecosystem”, she said. The Union Minister said it was taken jointly by the National Payments Corporation of India (NPCI), payment banks and merchant banks, and not imposed by the government. She further said the MDR was not a tax and would not accrue to the government.

The finance minister said the Opposition was “searching for issues” and making allegations without fully understanding the matter. The finance minister said, "This is not a tax, this is not a cess, this is not even a surcharge. And the collection is not coming to the Consolidated Fund of India."

The collected amount will be shared among banks and other entities in the UPI ecosystem. Of the MDR collected, 40 per cent will go to customers' banks, 30 per cent to payment gateways, 20 per cent to the UPI app and the remaining 10 per cent to the sponsoring bank of the UPI app, she added.

From October 15, a 0.4 per cent MDR will apply to person-to-merchant UPI payments above Rs 2,000. The charge will be paid by merchants, not consumers, and will be capped at Rs 300 for transactions of Rs 75,000 or more. Payments between individuals, as well as the vast majority of everyday merchant payments, will remain free.

Essential services, such as railways, telecom, fuel and insurance, will attract a flat Rs 5 fee per transaction above Rs 2,000. Capital markets transactions (mutual funds, stockbroking) get a lower 0.02 per cent rate, also capped at Rs 300.

Small merchants collecting up to Rs 1 lakh a month via UPI QR codes remain fully exempt from any new charge and shield about 96 per cent of all merchant transactions.

A Journey of Three Decades Time passes faster than we realise. What feels like a journey that began only yesterday has today grown into more than three decades of a meaningful and fulfilling life devoted to education, journalism, and the empowerment of young minds. My professional journey began with journalism training in New Delhi in 1979. I went on to work as an independent journalist, drawing on my fluency in both English and Telugu. Over the years, I have edited and worked on Telugu articles in both languages, an experience that strengthened my command of language and sharpened my understanding of society, people, and contemporary issues. Yet, my principal profession and enduring passion have always been teaching. My decision to become a teacher was not merely a career choice—it was a calling. Teaching offered me the rare privilege of inspiring young minds, guiding them through their formative years, and making a lasting difference in their lives. I found immense satisfaction in simplifying complex concepts, nurturing curiosity, encouraging independent thought, and building confidence among students. Every moment in the classroom—every question, every moment of discovery, and every spark of understanding—reminded me why I had chosen this path: to empower young people through knowledge, values, and essential life skills. My teaching career began at the grassroots level as a Montessori teacher and gradually progressed to the position of Vice Principal. I had the opportunity to work in reputed educational institutions, including Dilsukhnagar Public School in Hyderabad, where I shouldered both teaching and administrative responsibilities. Although I have always considered myself, at heart, a teacher, my administrative experience enabled me to understand and contribute to the education system from a much broader perspective. For my students, I have always tried to be an approachable and dependable presence—someone they could turn to not only for academic support, but also for guidance and emotional encouragement. At the same time, I developed a reputation as a firm disciplinarian who believed that integrity, fairness, responsibility, and discipline were fundamental to education. I was also consistently appreciated for maintaining clear communication with parents and staff and for ensuring that examinations and other academic processes were conducted with transparency, fairness, and efficiency. As my career progressed, however, I began to feel that academic education alone was not enough. This realization led me to work more closely with students following the SSC and CBSE curricula, while consciously bringing life-skills education into my teaching. I came to understand that education becomes truly meaningful when it prepares children not merely to pass examinations, but to face life. Teaching emotional resilience, self-reliance, social awareness, communication, decision-making, and other practical life skills often had a deeper and more lasting impact than academic achievement alone. I saw how these skills could help students navigate challenges with greater confidence, maturity, and responsibility. My academic background provided a strong foundation for this approach. My degree in Psychology from the University of Madras helped me develop a deeper understanding of young people's minds, their emotional needs, and the influence of their family and social environments. My M.A. in Telugu with First Class from Osmania University.

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