BJD MP Santrupt Misra Opposes 0.4% MDR on High-Value UPI Payments – Funding Concerns

Overview \n Santrupt Misra , a Biju Janata Dal (BJD) MP, warned that the Centre’s decision to levy a MDR of 0.4% on person‑to‑merchant UPI transactions above ₹2,000 could hurt merchants and consumers. \n\n Key Developments \n \n The 0.4% fee will become effective from 15 October 2026 . \n Misra argued that the RBI gave the government a dividend of ₹2.86 lakh crore in FY 2025‑26, part of which could fund the digital‑payment infrastructure. \n He highlighted that the NPCI is owned by large banks that earned a profit of ₹2.5 lakh crore last year and could contribute to the system. \n Misra warned that merchants may cut profit margins or pass the cost to buyers, contrary to the government’s claim that consumers will not feel the impact. \n \n\n Important Facts \n The proposed MDR applies only to transactions where the amount exceeds ₹2,000 and is paid to merchants. It does not affect peer‑to‑peer transfers below that threshold. The government’s rationale is to create a sustainable funding model for the digital‑transaction infrastructure . \n\n UPSC Relevance \n This issue touches upon several GS papers. GS3 candidates should understand the role of RBI , the funding mechanisms for payment systems, and the impact of fees on market dynamics. GS2 aspirants need to note the parliamentary debate in the Rajya Sabha and the stance of a regional party. \n\n Way Forward \n Possible alternatives include: (i) allocating a portion of the RBI dividend to the payment ecosystem; (ii) asking profit‑making banks that own NPCI to fund the network; (iii) keeping the MDR at a lower rate or limiting it to specific merchant categories. A balanced approach would protect merchants, avoid price‑pass‑through to consumers, and ensure the long‑term viability of the UPI platform.