'Chungijivis' should stop money-extracting arrangement: Akhilesh Yadav on UPI row

Samajwadi Party president Akhilesh Yadav on Thursday attacked the BJP government over the proposed levy of Merchant Discount Rate (MDR) on certain high-value UPI transactions, alleging that the move amounted to imposing a "chungi" (tax) on digital payments.

Addressing a press conference here, Yadav said the government had earlier spoken of making India a trillion-dollar economy but was now seeking to earn from people's transactions.

"Chungijivis should stop this arrangement of extracting money," Yadav said.

"This is their way of making a trillion-dollar economy. They showed us the dream of making a trillion-dollar economy. You are saying they are doing 'chungi' (toll collection); they have imposed a chungi," he said.

"Earlier, chungi used to be abolished for traders. But now the 'chungijivis' have imposed a chungi that you will have to pay before making any transaction," he said.

Yadav attacks government over UPI charges

Yadav further alleged that the government had no answer to inflation and corruption and claimed that "this government is going to go".

He alleged that UPI had now been turned into a mechanism for extracting money.

In a post on X earlier, Yadav said, "The BJP, in its pursuit of earning from others' earnings, is now even charging fees for payments made via UPI; what kind of trillion-dollar economy can be built this way?"

He also described the BJP as "chungijivi", alleging that it was "squeezing money even from payment gateways".

MDR to apply to certain high-value UPI transactions

Under the new UPI framework announced by the National Payments Corporation of India (NPCI), a 0.4 per cent MDR will apply from October 15 to certain person-to-merchant UPI transactions above Rs 2,000. The charge will be paid by merchants and capped at Rs 300 for transactions of Rs 75,000 or more.

Person-to-person UPI transfers and merchant transactions up to Rs 2,000 will remain free. The government has also said that consumers will not be required to pay the MDR directly.

Government outlines how MDR will be shared

The government has said the MDR will be shared among participants in the payments ecosystem, including banks, payment service providers and UPI application providers. Certain essential and thin-margin sectors, including railways, telecommunications, insurance, fuel and agricultural inputs, will attract a flat Rs 5 MDR on transactions above Rs 2,000.