Jairam Ramesh hits back at Sitharaman on taxation bill

Congress leader Jairam Ramesh on Friday hit back at Finance Minister Nirmala Sitharaman after she accused him of spreading “canards” over the Taxation and Other Laws (Amendment) Bill, and said Government assurances or tweets are no substitute for statutory safeguards.

In a long post on X, Ramesh said the finance minister’s response to his “so-called canards” hinges on five “dubious claims”.

He said the claim that Merchant Discount Rate (MDR) applies only to merchants and not to customers is misleading.

“MDR is charged to merchants but it is inevitable that they pass transaction costs on to consumers through higher prices or differential pricing — just as they do with credit and debit card payments. Moreover, ‘merchants’ include medium and small businesses, kirana stores, and even street vendors, the very backbone of UPI adoption,” the Congress general secretary in-charge communications.

On the claim that it will support banks and fintechs to invest more in infrastructure, innovation, and security, Ramesh said UPI was built as a public digital good, and the Government has a responsibility to protect it.

“Zero MDR was critical to its success, enabling small shops and roadside vendors to make and receive payments without transaction charges. Better alternatives are also on the table. The RBI has the capacity to support the UPI ecosystem without charging merchants or consumers. Why is this option not being considered,” he asked.

On the Steering Committee yet to decide on MDR, the Congress leader said policy-making is not just for the present but also for the future.

“The Bill removes the statutory guarantee of zero-MDR under Section 10A. It leaves future charges to Government notification. Government assurances or tweets are no substitute for statutory safeguards, especially when earlier assurances on retaining zero-MDR are now being reversed,” Ramesh said.

He further said that the timing raises legitimate concerns.

The amendment comes shortly after the U.S. Trade Representative’s 2026 National Trade Estimate Report criticised India’s UPI and RuPay ecosystem, as well as Brazil’s Pix, since they take up market share from Visa and MasterCard, Ramesh said.

“While Brazil has continued to back Pix as a strategic public digital infrastructure, the Modi Government is now weakening statutory protections for UPI,” he alleged.

Ramesh pointed out that Google Pay and Walmart-controlled PhonePe together process over 80 per cent of UPI transactions.

“At a time when foreign-controlled platforms already dominate the ecosystem, India should be strengthening and not weakening its public digital infrastructure,” he said.

The Congress leader said this issue could have been discussed in Parliament.

“The Parliament has been dysfunctional in this session entirely due to the Modi Government’s refusal to be accountable to Parliament. The Opposition’s demand for a statement by the Home Minister on the police brutality on students on June 20th has not been heeded,” he said.

“Attending Parliament and answering questions is not optional, it is part of a minister’s constitutional responsibility. It is the Modi Government’s evasion of responsibility which has created this situation of chaos in the House and it is the Modi Government that exploited it to pass this Bill through a voice vote within minutes of its introduction in the Lok Sabha,” Ramesh said.

Sitharaman on Thursday had said MDR on digital transactions applies to merchants and not to customers, and the MDR charge would support banks and fintech to invest more on infrastructure and security.

Hitting out at Ramesh over his remark that ordinary people may have to pay more for using UPI, Sitharaman, in a post on X, had said the UPI and Services Steering Committee headed by NPCI is yet to decide on the MDR, which would happen only after Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026.

Through the bill, the Government has proposed that the central Government can decide, via a notification, which electronic payment modes or transactions would remain free.

Ramesh, in a post on X, had attacked the Government over the bill, asking whether Prime Minister NarendraModi is seeking to dilute UPI and open the digital payments sector to American businesses “under pressure” from his “good friend Donald Trump”.

Ramesh said the Modi Government’s latest bill removes the statutory guarantee that keeps UPI transactions free.

It opens the door to MDR charges, which can easily be expanded to all payments in the future, he had said on X.