Ashneer Grover has a sharp take on the new UPI charge. His point: if the government had not let Zee founder Subhash Chandra off a Rs 22,000 crore due, that money alone could have kept UPI free across India for the next 20 years, going by the government’s own subsidy math of Rs 8,000 crore a year.
His timing is no accident. NPCI has confirmed a merchant fee on UPI payments above Rs 2,000, starting October 15, 2026. Grover called the new charge plain tax collection, and backed his claim with numbers from NPCI’s own balance sheet.
Quick Summary
| Point | Detail |
|---|---|
| What changed | MDR of 0.4% on UPI payments above Rs 2,000, capped at Rs 300 |
| Who pays | Merchants, not customers, for now |
| When it starts | October 15, 2026 |
| Who is exempt | UPI and RuPay debit payments up to Rs 2,000 stay free |
| NPCI cash reserve | Rs 6,119 crore, per Grover’s post |
| NPCI pre-tax profit | Around Rs 1,900 crore |
| Government’s UPI subsidy claim | Around Rs 8,000 crore a year |
| Chandra NCLT settlement | Rs 22,006 crore in claims settled for Rs 6.5 crore |
What Actually Changed on UPI
UPI and RuPay debit transactions carried zero MDR since 2020, under an amendment to the Payment and Settlement Systems Act. That changed this monsoon session, when Parliament amended Section 10A of the Payment Act, opening a legal path for MDR again.
On September 14, the government notified that UPI and RuPay debit transactions up to Rs 2,000 stay free. For anything above that, NPCI announced a 0.4% merchant discount rate, capped at Rs 300 for transactions of Rs 75,000 and above. This starts October 15, 2026.
The Chandra Sahab Reference, Explained
The “Chandra sahab” line points to Zee and Essel Group founder Subhash Chandra. On August 25, an NCLT order in his personal insolvency case approved a settlement of just Rs 6.5 crore against admitted claims worth Rs 22,006 crore. Banks and government sources later clarified that this figure represents claims against Chandra as a personal guarantor for loans taken by Essel/Zee-linked companies, not a personal loan he took himself. Still, the case drew heavy criticism for what looked like a near-total write-off for a big defaulter.
Grover’s message is not a strict calculation. It is a sarcastic jab. His point is that settlements like this run far higher than what the government claims it spends to keep UPI free, so a new merchant charge feels unnecessary.
Why Grover Is Calling This a Tax
Grover’s argument rests on one question: who is actually losing money on UPI? His post laid out these figures:
- NPCI holds Rs 6,119 crore in hard cash on its balance sheet.
- NPCI’s pre-tax operating profit stands near Rs 1,900 crore.
- The government collected around Rs 1,000 crore in tax from NPCI last year.
- The government’s own subsidy figure for UPI is roughly Rs 8,000 crore a year.
His math is simple. NPCI already sits on healthy cash and profit, so it could fund zero-MDR UPI on its own for years. He argues the new charge is a revenue move, not a real cost recovery.
The Bigger Picture: Who Really Ends Up Paying
Grover’s point holds up on a basic level. A single defaulter case wiped out claims worth nearly three times the government’s entire yearly UPI subsidy bill. Recovering that money properly, instead of settling for a fraction of it, would have removed the need to find fresh funding for UPI in the first place.
Instead, the government is now leaning on businesses to fund the gap through MDR. That sounds fine on paper, since customers are technically exempt. But businesses do not absorb new costs quietly. A 0.4% charge on every transaction above Rs 2,000 is a real expense, and most merchants will look to recover it, whether through slightly higher prices, reduced discounts, or a push toward cash for bigger bills.
In effect, the cost still lands on the customer. It just takes a longer route, through pricing instead of a direct fee. So the “customers are exempt” line is true only in the narrowest sense.
What This Means for You
Person-to-person transfers stay free at every value. Merchant payments up to Rs 2,000 stay free too. The new charge applies only to merchant payments above Rs 2,000, and it is charged to the merchant, not deducted from your payment directly.
The real question is how fast that cost shows up in retail prices. Watch how retailers you deal with regularly respond once the rule kicks in on October 15.
FAQ
Q: Will I be charged for UPI payments under Rs 2,000?
No. Payments up to Rs 2,000, UPI or RuPay debit, remain free for both P2P and P2M transactions.
Q: Who pays the new 0.4% MDR?
Merchants pay it directly, though the cost may eventually reach customers through pricing.
Q: When does the new UPI MDR charge start? October 15, 2026, for merchant UPI transactions above Rs 2,000.
Q: What is the maximum MDR fee under the new rule?
Capped at Rs 300, once the transaction value reaches Rs 75,000 or more.
Q: Why did Ashneer Grover call this a tax?
He argued NPCI’s existing cash reserves and profits could already fund a free UPI system, so a new charge is a revenue move rather than a necessary cost recovery.
Q: Who is “Chandra sahab” in Grover’s tweet?
Subhash Chandra, founder of the Zee and Essel Group, whose Rs 22,006 crore claims were settled for Rs 6.5 crore in an August 2026 NCLT order.
Q: Does this affect person-to-person UPI transfers?
No. P2P transfers stay free regardless of amount.
