- 10 minutes ago
This special News Today broadcast covers key economic, geopolitical, and national developments. The programme examines the political and economic debate surrounding the levy of a 0.4 percent merchant discount rate on Unified Payments Interface transactions exceeding 2,000 rupees.
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NewsTranscript
00:00Good evening, hello and welcome. You're with the news today, your prime time destination news,
00:04newsmakers, talking points. Wednesday night, we have a big talking point tonight about that big
00:09controversy over UPI. Charges on UPI being levied by the government, essential or avoidable? The
00:16phone page CEO, Sameer Nigam, will be among my special guests tonight. Also, West Asia now
00:22threatening to open a new front in the war. Saudis claim Houthis are targeting the holy city of
00:30Mecca. Kalmiz Ahmed, India's leading West Asia expert, will join me on that developing situation.
00:37But first, as always, it's time to get cracking with the nine headlines at nine to nine.
00:43Political heat rises over merchant fees being charged on UPI payments above 2,000 rupees.
00:49Leader of the opposition, Rahul Gandhi, now claims that the Modi government crumbled under
00:55US pressure, demands a rollback of what he is calling a UPI tax.
01:04Mecca admits its mistake in child sex abuse content on Instagram. Center reclassifies Mecca
01:11as a service provider and an intermediary as it charges money to modify algorithms.
01:22Mawwa Moitra attack with eggs once again in her own constituency, Krishna Nagar alleges BJP
01:29hand behind the incident, second egg attack on a TMC MP in just the last three months.
01:39Sena UBT MP Aditya Thakre denies any link in Disha Salian case, claims he never met on
01:47new Disha, slams deliberate character assassination attempt.
01:54Tamil Nadu Chief Minister Vijay's London trip ends but the controversy escalates further.
02:00His planned fan meet in London was cancelled after huge crowds gathered outside his hotel,
02:06sparking public safety concerns.
02:10Amidst the festive season, rice prices climbed to a one-year high with early Basmati paddy arrivals
02:17already showing prices around 20% higher than last year.
02:23The Pakistan-based Shahzad Bhatti Network declares banned terrorist's outfit under UAPA move after
02:30a nationwide crackdown in which 253 people were detained, more than 80 FIs registered.
02:39Pakistan naval ship gets severely damaged after it collides with Indian warship.
02:44India protests unprofessional Park Navy conduct, summons top Park diplomat,
02:48and no damage reported to the Indian warship.
02:54And Kensington's mountain, West Asia, after Houthis strike Holy City,
02:59after Houthis allegedly make an attempt to strike the Holy City of Mecca,
03:04Saudi Arabian air defense intercepts the drone.
03:07India expresses deep concern over targeting of the Holy City.
03:27All eyes now on the big breaking news at the moment because the key Russian oil-linked bill
03:33is now going to be within the next 24 hours, possibly passed by the U.S. Congress.
03:39The bill proposes up to 100% tariff on countries buying Russian oil.
03:45This bill will come up for vote in the U.S. House of Representatives.
03:49India could also be among the countries that is facing 100% tariff.
03:54Remember, the bill was passed by the U.S. Senate on August 8th.
03:57It's now being fast-forwarded to the House of Representatives.
04:00So, come tomorrow, tariffs could be potentially raised by 100% for Indian goods.
04:07Joining me now from Washington, D.C. is Rohit Sharma, who's tracking that.
04:12Rohit, is it more than likely that within the next 24 hours,
04:16the U.S. House of Representatives will pass this bill,
04:19effectively meaning the U.S. Congress is approving 100% tariffs
04:23on countries like India buying Russian oil?
04:27Well, Radhib, yes, the bill is scheduled to be voted today
04:30after 3.45 Eastern in Washington, D.C. today.
04:35It will obviously go through another proper procedural vote before that.
04:38And then, if the House decides to vote on it and gets it approved,
04:43it then heads to President Trump's desk for becoming a law.
04:46So, yes, potentially, President Donald Trump will have a tool at his disposal
04:51to sanction or, rather, to put tariffs on countries that are buying oil from Russia.
04:56But it does not automatically put that on any country.
05:00Radhib, key differentiator is it depends on the president if he wants to do it
05:06and which countries he wants to impose those tariffs on.
05:09But it will be a law if President Trump signs it.
05:11And any other president, even after President Trump leaves the office in 29,
05:14could potentially use this.
05:17So, a very interesting development as far as this Russia sanctioned bill has come.
05:21And to give you a little more background on this, Radhib,
05:24you know, this was initially started, you know, as a tool to threaten Russia
05:28when Lindsey Graham was alive.
05:29And he started off with 500% tariffs.
05:31And the Senate, as you said, in August passed this bill
05:34as kind of a tribute to Lindsey Graham for being that, you know, Russia hawk forever.
05:43But then, as we've seen, you know, it surprised a lot of people within the U.S. Congress
05:47that's been fast-tracked.
05:48And some people say it's also because the Chinese president is going to be here in the U.S. next
05:53week.
05:53And it's also a kind of, you know, a signal to him that Russia, rather,
05:58should come to the table and start negotiating.
06:01Right.
06:04But clearly, weaponization of tariffs going on concerns, therefore, will be there on the Indian side.
06:10Rohit Sharma, with all those details, appreciate your joining us.
06:13Now, the American hand is also having some kind of a role,
06:19allegedly, according to the opposition, in what is our top story today.
06:22Because a day after the government announced that there will be a levy of 0.4% on UPI transactions
06:30above rupees 2,000, leader of the opposition Rahul Gandhi has accused the Narendra Modi government
06:37of taking this decision under U.S. pressure
06:39and bowing down to the Trump administration, which is trying to protect,
06:44is the claim being made, the credit card companies that are based in the United States.
06:50The government, however, claims that 96% of the UPI transactions will be out of this merchant discounting rate.
06:57And there was a sudden inevitability about this happening sooner rather than later,
07:02with the government claiming that consumers will be protected.
07:05The burden of this tax, of these discount rates will not be passed on to consumers.
07:12Take a look at this report.
07:25A day after the National Payment Corporation of India announced 0.4% merchant discount rate charge
07:32on UPI transactions above 2,000 rupees, the opposition is raising the heat on the government,
07:39calling the new levy a tax.
07:41Leader of opposition Rahul Gandhi posted a video on social media
07:45accusing the government of surrendering to American pressure.
07:52Modiji has a completely different concept.
07:54He is neither left nor right.
07:55He has decided to lie down straight and prostrate himself in front of Donald Trump.
08:02He has put a tax on every single Indian person by taxing UPI
08:06and giving a huge amount of money to the United States.
08:10Modiji, please stop lying down in front of the United States.
08:14Have a spine.
08:15Khaade ho jaayye.
08:17Aur UPI tax ko vaapis lije.
08:19Dhani waad.
08:20The Congress has alleged the new charges are for the benefit of companies like G-Pay
08:26and PhonePay, which have significant American shareholding.
08:31What is UPI?
08:33UPI is nothing but a digital platform that was created by India's institutions,
08:37India's banks for digital payments.
08:39MDR is merchant discount rate, a processing fee that is given to banks and institutions
08:44to process this.
08:45And like I said, the new rules will involve a 0.4% MDR on commercial transaction upwards
08:53of 2,000 rupees.
08:55The total value of that transaction is 66.22 lakh crore rupees.
09:01That's the quantum of money that the tax will be levied on.
09:05That's the quantum of money that has been put into the pockets of American companies
09:10at the cost of ordinary Indians.
09:12The BGP has rejected Congress charges.
09:15The party says the charges will be paid by merchant and not consumers.
09:20And it will not affect the armed people.
09:25This country is not a great 50% of global financial transactions in 11 countries.
09:31In the UPI, there are other people who are doing it in the UPI.
09:34There are other people who are doing it in the UPI.
09:35And this will increase even further.
09:35And perhaps this is the only success that Rahul Gandhi's mind
09:40is created in the UPI and Congress's mind is created in the UPI.
09:44And that's why the UPI's mind is created in Congress and is created in the UPI.
09:47Rahul Gandhi must know that it is a platform which is being not only used in India
09:52but now it is being used in many countries and many countries are introducing this platform.
09:56So it needs to be very robust, very robust and it requires for being robust,
10:02it also requires a little bit of investment as well.
10:04And that investment will be channelized through the charges for small charges
10:10to be borne by merchants and not by the end user of the consumer.
10:15UPI transactions totaled 314 lakh crore in value in 2025.
10:22Government claims over 55 crore people use UPI as of June 2026
10:29making it the world's largest real-time payments platform.
10:33The newly announced charges on UPI transactions are now a political flashpoint.
10:39With the opposition sensing an opportunity to corner the government.
10:43Bureau Report, India Today.
10:47Okay, joining me now is my first special guest today.
10:50Sameer Nigam, PhonePay CEO joins us.
10:53Good to have you on the show, Sameer.
10:55You've come out strongly in support of the government's decision
10:59to have this merchant discount rate of 0.4%
11:05above transactions, above rupees 2000.
11:08And you believe that this will create, I read somewhere,
11:11an enabling system for merchant discount rates.
11:14But how do you respond to those who say that the merchants,
11:17those who we buy products from, above rupees 2000,
11:21will eventually start passing the burden on to consumers,
11:25that this is some kind of a consumer tax in a way?
11:30I've been pretty consistent, Rajdeep, over the last six years.
11:34When UPI started, there was an MDR of 0.65%.
11:37People have forgotten how fast the market grew in the first four years as well.
11:41It was growing exponentially.
11:43And it is only in 2020, during COVID,
11:46that the government introduced or made MDR free.
11:49So as far as we were concerned in the industry,
11:53even without or with MDR,
11:55UPI was growing extremely fast,
11:57as were, by the way, digital wallets,
11:59if you remember, 10 years ago,
12:00which also had an MDR of over 1% at the time.
12:03So I think it was a myth to begin with
12:06that MDR had to be free for payments to take off.
12:09The second thing is that,
12:12one, in law, it is illegal right now for merchants to transfer the cost to customers.
12:16But even in practice,
12:18a lot has changed since 10 years ago.
12:21We now have almost 60 lakh or 6 million merchants
12:25with POS devices in the country,
12:27accepting credit cards,
12:29rupee cards,
12:30wallets,
12:31each with an interchange of 1.5% to 2.5%.
12:34Debit cards of all sorts in India
12:36have an interchange of 0.65% even today.
12:39So UPI remains at 0.4%,
12:42the lowest MDR in the world,
12:45not in India,
12:46of all networks out there.
12:48That's an important thing to land.
12:50Second,
12:5295% to 96% of the transactions,
12:55what are called P2M merchant transactions,
12:58are below 2,000 rupees.
13:00So for an average person like you or me,
13:03on average, 95%, 96% of the time,
13:07your daily groceries,
13:08your rickshaws,
13:09your public transport,
13:10all of that,
13:11you're not going to be having a merchant getting charged
13:14when you make a payment.
13:15On the 4%,
13:16we don't believe that the merchants
13:18will charge the customer
13:19because they've not done it
13:21in the cards of wallet economy
13:22or UPI even before this.
13:25Samit,
13:25Samit,
13:26there are two parts to what you've said.
13:28You know,
13:28you seem to be suggesting
13:29that consumers will not be charged
13:31and based on a past experience
13:34that it will not be passed on to consumers
13:36but nothing technically stops merchants
13:38from passing it on to them.
13:41It could be economically feasible for them.
13:43Also,
13:44they could do it either through
13:45high prices,
13:47implicit surcharges.
13:49Do you agree with that?
13:50Let's get that very clear
13:51that the possibility exists
13:53that merchants will pass on
13:54any levy on them
13:55on to consumers.
13:59Actually,
14:00any surcharge linked to paying UPI MDR
14:03is illegal
14:03through the Gazette notification itself
14:05and the NPCI circular
14:07explicitly again confirms that.
14:09So,
14:10that is actually
14:11that burden is on the acquiring banks
14:13and payment aggregators
14:14like us
14:14to ensure
14:14that our merchants
14:15don't actually transfer any cost
14:17to the customer
14:18for accepting UPI payments.
14:21Now,
14:21whether they're transferred
14:22indirectly or not,
14:23I'm again saying
14:25I believe that the chances of that
14:27are low
14:28for the following two reasons.
14:30Most of the categories
14:32where the margins
14:32are very, very thin
14:33like utilities
14:34have already been exempted.
14:36Bill payments
14:37is capped at 5 rupees.
14:39Insurance
14:39is capped at 5 rupees.
14:41Stock broking
14:42is at 0.02%.
14:44Petrol is capped at 5 rupees.
14:46So,
14:47there are multiple carve-outs
14:48even to this 0.4% MDR
14:51where the government
14:53has wisely,
14:53I would say,
14:54said that we will floor
14:56the MDR total
14:57to a flat number.
14:59So,
14:59it remains affordable
15:00and it's not transferred.
15:02The categories
15:03where there will be,
15:04in fact,
15:05MDR
15:06that is closer
15:07to the 0.4% intended
15:08are things like
15:10retail,
15:11clothing,
15:13dining,
15:14travel,
15:15entertainment
15:16which have a much
15:17richer margin structure
15:18to be honest
15:18and they are already
15:20actually getting
15:20a large number
15:21of credit card
15:21paying customers
15:22and wallet customers
15:24forever.
15:25So,
15:25they were paying.
15:26They were not the ones
15:27who asked for 0 MDR.
15:28You know,
15:29but the point,
15:30Samir is,
15:31you know,
15:32you're saying
15:33majority of transactions
15:34by volume
15:35are less than 2,000
15:36therefore people
15:37will not be affected
15:38in any way.
15:39But the fact also
15:40is,
15:41Samir Nigam,
15:41that transactions
15:42above rupees 2,000
15:43may constitute
15:45only 4%
15:46of transactions
15:46by volume
15:47but the figures
15:49show they actually
15:49constitute about
15:5066%
15:51of the total
15:52UPI value.
15:53So,
15:54transactions of high value
15:55those made at hospitals,
15:56hotels,
15:57restaurants,
15:57retailers,
15:58as you mentioned,
15:59schools,
16:00all of this
16:01could be potentially
16:02under the scanner
16:03and therefore
16:04that economic impact
16:05cannot be underestimated.
16:07Do you agree?
16:10True.
16:11But again,
16:12I would request you
16:13please study
16:14the annexures
16:15that NPCI
16:16has provided
16:16in this circular.
16:18A lot of the
16:19categories you mentioned
16:20actually have a cap
16:21of 5%,
16:22rather 5 rupees,
16:24it's not 0.4%
16:25for exactly that reason.
16:27Education comes to mind,
16:29bill payments
16:29comes to mind,
16:31petrol,
16:31which is
16:32where a lot of spending
16:33happens on the consumer side,
16:34is capped at 5 rupees.
16:36So,
16:36it is not actually
16:37a significant amount.
16:38The average petrol
16:40pump ticket size
16:41is about 6,600 rupees.
16:44So,
16:44the effective MDR
16:45at 5 rupees
16:46is negligible.
16:48So,
16:49they have looked
16:49at the math
16:50and again,
16:51I say this
16:52as an invested party,
16:54I would love
16:54if it were just
16:55very high across the board,
16:56but I'm telling you
16:57pragmatically,
16:58this is a right balance.
16:59A very large part
17:00of that 66%
17:02that people are talking about
17:03is in categories
17:05like insurance,
17:06like the capital markets,
17:08like petrol,
17:10like bill payments
17:11and those are exempted out.
17:12They are basically
17:13at flat 5 rupees.
17:14You know,
17:16may I just ask you though,
17:18how do you respond
17:19to critics
17:19like former
17:20Bharat Paye co-founder
17:22Ashneer Grover
17:23who created a bit of a stir
17:24by saying
17:25levying charges
17:26on UPI transactions
17:28amounts to
17:29some kind of
17:29tax collection
17:30and this
17:312,000 rupees threshold
17:33is economically arbitrary.
17:35How do you respond
17:35to the Ashneer Grovers?
17:39I won't comment
17:40simply because
17:41I don't take him seriously.
17:46No, no.
17:47You don't take him seriously
17:48can't be an answer.
17:49The answer I want to know,
17:50how will you respond
17:51to not just
17:52Ashneer Grover?
17:53There are others
17:53who are saying
17:54levying charges
17:55on UPI transactions
17:57in this manner
17:57will effectively
17:58amount to
17:59tax collection.
18:02Ironically,
18:03the same people
18:04saying this
18:05are ignoring
18:06the fact that
18:06if
18:07the merchants
18:08not bearing
18:09this
18:10MDR,
18:11it was the government
18:12that's actually
18:13been paying
18:13the industry subsidies
18:14through tax dollars
18:15directly for the
18:16last five years.
18:17That's exactly
18:18what we as an industry
18:19hate.
18:20We don't want
18:21subsidies from
18:21the government.
18:22We stand
18:22on our own feet.
18:24We raise equity,
18:25we raise debt
18:26as a business
18:26and we are running
18:27for-profit businesses
18:29and we don't
18:30want to be
18:31beholden to
18:31government subsidies
18:32because the fact
18:34is if the industry
18:35is spending
18:3510-12,000 crores
18:36a year,
18:37Rajdeep,
18:38at today's volumes,
18:39paying 2,000 crores
18:40in subsidy
18:41doesn't cut it.
18:42We are all
18:42bleeding money.
18:43All our balances
18:44are in public domain
18:45and if the government
18:47does pay us
18:48that much money,
18:50surely we'd be
18:51the only market
18:52in the world
18:52where the government
18:53is paying 10,000 crores,
18:5415,000 crores
18:55to the industry
18:56but in much,
18:57much smaller economies,
18:59MDR works.
19:00200 markets
19:00in the world,
19:01India is the only one
19:02which had this weird
19:03thing called
19:04zero MDR.
19:05It's never existed
19:06anywhere from Brazil
19:07to Russia to
19:08you name it,
19:09any market.
19:10No, but how
19:11will you respond
19:13again, Samir,
19:13into the political
19:14argument now.
19:15The political argument
19:16which is being made
19:17by the Congress
19:18party for example
19:19that a lot of this
19:20is being done
19:21under US pressure
19:22that political parties
19:25are saying
19:26that the Master Cards
19:27and the visas
19:27were lobbying
19:28with the government
19:29to ensure
19:30that the MDR
19:30is in place
19:32because they felt
19:33otherwise they were
19:34losing out
19:34in this ecosystem
19:35and they were
19:36using their clout
19:37with the US
19:37administration
19:38to put pressure
19:39on the Modi government.
19:43I have friends
19:43at both Visa
19:44and MasterCard
19:45as well
19:45and I think
19:45they're exceptionally
19:46good global networks
19:47so let me say this.
19:50I have shared
19:50with them
19:51since 2016-17
19:54that Visa
19:54and MasterCard
19:55need to understand
19:56India is a mobile
19:57first market
19:57not a cards
19:58first market.
19:59I'm happy to say
20:00after 10 years
20:01we just at
20:02the Global Fintech Fest
20:03we finally launched
20:04Tap and Pay
20:05using safeguards
20:06within the app.
20:07Something that's been
20:08live with Apple Pay
20:09and Samsung Pay
20:09and Google Pay
20:10out West
20:10for 10 years.
20:11It finally launched here.
20:13Visa and MasterCard
20:14will grow
20:15their market share
20:15of their transactions
20:16if they solve
20:18for India
20:18doing what India needs.
20:21But if anyone
20:23believes
20:23in the political
20:24spectrum or otherwise
20:25that Visa
20:27and MasterCard
20:28somehow benefit
20:28because UPI
20:29becomes chargeable
20:30I don't see that
20:31in the business.
20:31By the way
20:32I can say this
20:33with some confidence
20:34because we have
20:3570-80 million
20:35cards on file
20:36as well from Visa
20:37and MasterCard.
20:38We are one of
20:38the largest payment
20:39processors for Visa
20:40and MasterCard
20:41as well.
20:41And I am telling you
20:42that the difference
20:43was not 0.4%
20:44of MDR.
20:45It was the product.
20:47UPI acceptance
20:48it required
20:49a 10 rupee QR code
20:50at a shop
20:51or a self QR
20:52by a delivery boy
20:53or a rickshaw.
20:54There is no such
20:55acceptance network
20:56for Visa and MasterCard.
20:57You need
20:58several thousand rupee
20:59post device.
21:00How many people
21:01in India were putting that?
21:02So they have to innovate
21:03on that side
21:03and that started happening.
21:05Let me ask you
21:06in conclusion
21:07the domestic competition
21:09question that is being
21:10raised by some
21:11Sameer.
21:11The MDR revenue
21:13is going to be
21:14distributed
21:14among banks,
21:16acquirers,
21:17UPI apps.
21:18Given that
21:19phone pay
21:20and Google pay
21:20almost dominate
21:21UPI,
21:22will this monetizing
21:24of the ecosystem
21:25strengthen the position
21:26of large players
21:27like you
21:28rather than promote
21:29genuine competition?
21:30Small fintech
21:31will end up
21:32losing out
21:33and thereby
21:33the entire ecosystem
21:35created over digitization
21:36will lose out.
21:39Because again
21:41you mentioned
21:41let me count the actors.
21:43The issuing bank
21:44which is the
21:44customer's bank
21:45gets 40%
21:47of the MDR
21:47right off the bat.
21:49Then there is
21:50the PSP bank
21:50at 10%,
21:51the TPAP
21:52at 20%
21:53which is apps
21:54like us and Google Pay.
21:55That is the space
21:55we operate in.
21:56We are fighting
21:57for the 20%
21:58of the MDR pay.
21:59Then there is
22:00the acquiring bank
22:01and the payment aggregators.
22:03Of that 20%
22:04we are at about
22:0545%
22:06right?
22:07So that is the size
22:07of the pie.
22:09People make it sound
22:10like if I am 45%
22:11of payments in India
22:12I am getting 45%
22:13of MDR.
22:14I wish life
22:14were that easy.
22:15It is not linear math.
22:17Fact of the matter
22:18is UPI is one
22:19of the most complex
22:20it is a four party
22:21model as it is called.
22:22There is acquirers,
22:23there is apps,
22:24there is sponsor banks,
22:25there is issuers.
22:26There is a lot of people
22:26that feed
22:27and I am not even
22:28including NPCI
22:29yet.
22:30And then I don't
22:31know if you noticed
22:31out of that money
22:33that we make
22:33NPCI has announced
22:355% will be withheld
22:36to make sure
22:38that small merchants
22:39grow.
22:39So there is a 5%
22:40carve out.
22:41What used to be
22:41government digital incentive
22:42is now NPCI
22:43digital incentive.
22:44So I think
22:46it is a very welcome
22:48move directionally
22:49to get MDR back in.
22:50But as they say
22:52India has a lot
22:55of participants
22:56investments.
22:57I want to leave
22:59it there.
22:59I want to leave
23:00it there Samir.
23:01Good to have you
23:02on the show
23:03giving us
23:03your perspective
23:04about why you
23:05believe that this
23:06is a welcome move.
23:07Thank you very much.
23:10Okay let's now
23:11then raise the big
23:12questions on this
23:12issue of great
23:13public interest.
23:14The UPI levy by
23:15the government
23:16is it essential
23:17or avoidable?
23:18Will merchants
23:19shift to cash
23:20again?
23:21Will consumers
23:22end up paying
23:23this UPI levy?
23:24Free UPI
23:25is it subsidizing
23:27private firms
23:28as is being
23:29argued.
23:30Joining me now
23:31Professor
23:31Krishnamurti
23:33Subramaniam
23:34former Chief
23:35Economic Advisor
23:36to the government
23:37Santosh Merotra
23:38visiting Professor
23:39at the Centre
23:40for Development
23:40University of
23:41Bath.
23:42He's also been
23:42with the Centre
23:43for Labour
23:44at JNU.
23:45I've heard
23:46I'm going to
23:47hear both of you
23:49patiently to give
23:50why one is for
23:51and one is against
23:52presumably.
23:53But Santosh Merotra
23:54you go first.
23:55There are those
23:55who are saying
23:56that this is
23:58something that
23:59was unavoidable
24:00that at some
24:01stage or the
24:02other the
24:03government would
24:03have to stop
24:04subsidizing the
24:05UPI payment
24:06system and it
24:07is a very
24:07minimal merchant
24:09charge that
24:09they have levied.
24:10Your response.
24:11Why are you
24:12so critical of
24:13it?
24:16Well I'm not
24:17so seriously
24:18critical of it
24:19as you assumed
24:20Rajdeep.
24:21First of all
24:22I have been
24:23saying that
24:25what I am
24:26critical of is
24:27the fact that
24:28you rightly
24:29noted that the
24:30government has
24:30so far been
24:31subsidizing
24:32the merchants
24:34up to the
24:35tune of
24:36rupees 2000
24:37crores per
24:38annum.
24:39That's the
24:39subsidy that's
24:40coming out of
24:41your and my
24:42taxpayer money.
24:44So we are
24:45paying in any
24:45case Rajdeep
24:46and I see no
24:48reason whatsoever
24:49why the
24:50government should
24:52be subsidizing
24:53up to 2000
24:54crores at all.
24:56Now but
24:58someone has to
24:58pay the cost
24:59and since
25:01the
25:02beneficiaries of
25:03this program
25:04I mean of
25:05the UPI are
25:06not just the
25:07consumer but
25:08also three other
25:09parties on the
25:10business side
25:12the merchant
25:14second is the
25:15platform and
25:16the third is the
25:17bank.
25:18Now is it
25:20possible for
25:20instance if I
25:22was in government
25:23I could say to
25:25the government
25:26regulator can
25:28it be possible
25:30to actually
25:33distribute that
25:34cost between
25:36the three
25:37beneficiaries.
25:38I mean we
25:39remember, do and
25:40I know that
25:40banks are earning
25:42four lakh crores
25:43worth of profits
25:44every year.
25:45The big companies
25:46which are all
25:47multinationals
25:48which are
25:48platform owners.
25:50Merchants are
25:51the only small
25:52players and
25:54so it's not
25:55entirely fair
25:57to from my
25:58perspective that
25:59they should be
26:00paying.
26:01Someone has to
26:02bear the cost and
26:02I don't believe
26:03the government
26:03should be.
26:05So that's
26:06broadly my
26:07position Rajiv.
26:09So do you
26:12fear though that
26:13the merchants will
26:14pass on this
26:15burden to the
26:16consumers?
26:17Is that a
26:17genuine fear?
26:18That's a
26:19risk.
26:19I'm sorry I
26:20didn't deal with
26:21that.
26:21You're asking a
26:22legitimate question.
26:23It may well be
26:25that slowly this
26:26will begin to be
26:27passed on.
26:28But honestly in
26:30the last analysis
26:31the cost itself
26:330.4, let's
26:35assume for a
26:36second that if
26:37all that 0.4%
26:39is borne by the
26:40merchants, which
26:41I don't believe it
26:42should be.
26:43That's what I
26:43said.
26:45Suppose all of
26:46it was,
26:46you know, the
26:47cost is still
26:48quite small and
26:51therefore it may
26:53well be that the
26:54merchant decides that
26:56he'll bear some of
26:57the cost or she
26:57will and some of
26:59it will get passed
27:00on.
27:00So of course there's
27:01a legitimate fear
27:02that it will get
27:03passed on.
27:04You're asking the
27:05right question.
27:13opposition parties in
27:14particular or at least
27:15the congress party
27:16raising a red flag
27:17saying this is being
27:18done under US
27:19pressure to protect
27:20the master cards,
27:21the visas, the big
27:22credit card companies.
27:23Do you go along with
27:24that?
27:24Do you believe that's a
27:25legitimate argument
27:26argument that these
27:28decisions are being
27:29taken under pressure?
27:31Listen, this is not
27:33the first time,
27:34Rajdeep, that these
27:36people have put
27:39pressure on us.
27:40What was the
27:41interim trade deal?
27:42The interim trade deal
27:43was an outrage.
27:45I mean, thank God it
27:47is behind us and I'm
27:49just hoping that we
27:51are dragging out the
27:54negotiation for the
27:55trade deal as long
27:56as, you know, these
27:58campaigns for the
27:59House of Representatives
28:00and the Senate are
28:01going on because we
28:02know that Trump's
28:04position is going to
28:04become even weaker
28:06because please remember
28:07that even then the
28:10fear now is that they
28:13are threatening us in
28:14any case, the Graham
28:18bill, which is likely
28:19to go through very
28:20quickly, is going to
28:22make it legal because
28:23so far the 50 percent
28:25tariffs and all those,
28:26all that was happening
28:28last year was illegal
28:30and stated to be so
28:34and therefore struck
28:35down by the Supreme
28:36Court.
28:36This is legal.
28:38So this can,
28:39ultimately, what Trump's
28:41attitude towards India
28:42might be could well
28:44very well determine,
28:46you know, whether that
28:47100 percent or 50 percent
28:48or 25 percent extra
28:50tariff is imposed on us
28:51or not.
28:52And he's a rogue
28:53elephant.
28:54And in any case, you
28:55know, in behavior
28:57towards Iran, we've seen
28:59how he has misbehaved
29:01repeatedly, gone back on
29:03agreements struck with
29:05Iran.
29:05Right.
29:06And there is very little
29:08respect for India left any
29:11longer in the U.S.
29:12administration.
29:12So we have to be
29:13extremely careful.
29:18So net-net what you are saying
29:21is that while you're saying
29:24that eventually at some
29:25stage there was almost an
29:26inevitability of these
29:28merchant discount charges
29:30emerging that the government
29:32couldn't subsidize it forever,
29:34you do fear that over time
29:37merchants could pass on the
29:38burden on to consumers.
29:40and therefore that is
29:42something to be cautious
29:43about.
29:43And you're also saying
29:45somewhere that these
29:46decisions need to be taken
29:48with greater, I presume,
29:50that all the stakeholders
29:51will need to be taken
29:52into confidence.
29:53Am I broadly correct?
29:55Yes.
29:56But confidence is not
29:58not all that is required,
30:00Rajiv.
30:01What is required is
30:02the government becomes
30:04the regulator it is
30:05supposed to be.
30:06and, you know,
30:09apportions the cost
30:11between the three
30:13beneficiary parties.
30:14That's the only way
30:15this is going to get
30:16resolved.
30:17I don't see how else
30:18this is going to be
30:19resolved.
30:20I heard you,
30:20Professor Merotra.
30:21Okay, let me now turn to
30:23you, Professor Subramaniam,
30:25former Chief Economic
30:25Advisor.
30:26Now, how do you respond
30:27to what the government
30:28has chosen to do with
30:30these 0.4% MDR
30:34merchant discount rate
30:35that is chosen for
30:36UPI payments?
30:37Do you believe this
30:38was inevitable?
30:39It had to be done
30:40at some stage?
30:42You couldn't endlessly
30:43subsidize UPI?
30:44Or is there a fear
30:45that now you could
30:47actually, merchants will
30:48pass on the burden
30:49to consumers?
30:50That this is some
30:51kind of a tax, as
30:52Rahul Gandhi and
30:53others are calling it?
30:56Rajdeep, I'd like to
30:57frame this as, you
31:00know, what are we
31:00really trying to achieve
31:01with UPI?
31:02It's a spectacular
31:04success from the
31:05vantage point that I
31:06had at the
31:07International Monetary
31:07Fund.
31:08I've seen how many
31:09other countries are
31:10actually so appreciative
31:12of what we've
31:12accomplished.
31:13It was thought of as
31:15a public good that
31:16was created by the
31:17sovereign and
31:18therefore access
31:19actually has been
31:20made universal.
31:22Now, to that
31:23question about what
31:24are we trying to
31:24achieve, I think the
31:26objective should be to
31:27use UPI really to
31:29enhance credit
31:29creation in the
31:30economy, that will
31:32generate the interest
31:33income for the banks
31:34that can be used to
31:35fund whatever
31:36necessary investments
31:37in technology,
31:38cybersecurity, etc.,
31:40that can be made.
31:41I do not
31:42necessarily think
31:43that, you know,
31:45the transaction tax
31:46is certainly the
31:48most obvious way to
31:49go.
31:50Also, I think we
31:51have to understand
31:52here that the ad
31:53valorem or the
31:54percentage tax is
31:56certainly not
31:56consistent with the
31:57way the UPI works.
31:59tax, you know, if
32:00for instance, let's
32:00say I make a
32:01payment to you of
32:022 lakhs or if I
32:03make a payment of
32:042,000, you know,
32:05from the perspective
32:06of UPI, it's basically
32:07the same cost because
32:08all it does is a
32:09debit and a credit
32:10with the amount
32:11actually not
32:11mattering, you know,
32:12and so the ad
32:14valorem tax really is
32:15not consistent.
32:16But I think the
32:17important point I
32:18want to emphasize is
32:19that there is a
32:19phenomenal opportunity
32:21to use UPI as a
32:23win-win by focusing
32:24on credit creation.
32:25This is not
32:26necessarily the best
32:27way to put it to
32:32use.
32:32No, but the
32:33fact is that, you
32:35know, government is
32:35saying consumers will
32:37not be charged, that
32:3896% of transactions
32:40will remain unaffected,
32:42but the MDR is
32:43ultimately going to be
32:44borne by merchants
32:46and therefore
32:47merchants at some
32:48stage or the other
32:49could pass this on
32:51to consumers.
32:52Do you see this as
32:52that kind of a tax
32:53or not?
32:54Or do you believe
32:55that the opposition
32:55is the opposition
32:57justified in saying,
32:58look, we are worried
32:59about a tax that will
33:00be passed on to
33:01consumers in some
33:02kind of a tax form?
33:05Rajdeep, I want to
33:06focus on the economics
33:07because, you know,
33:08some of the arguments
33:10that you are putting
33:10across, you know,
33:12just a week back,
33:13you know, I remember
33:14how the bogus 2.6%
33:16claim on GDP, you
33:17know, the politicians
33:18had used.
33:18So I don't want to
33:19get into that, you
33:20know, instead focus
33:21on the issue here.
33:23I think the point
33:24here that you're
33:25talking about, you
33:26know, merchants
33:27will respond to this.
33:29It's possible they
33:30may pass on the
33:31cost to the consumer
33:32or they may decide
33:33to switch to an
33:34alternative.
33:35And I think the
33:36alternative may be
33:36use of cash, which
33:37is certainly not what
33:39we want because, you
33:40know, that is not
33:41one thing that will
33:42basically lead to
33:43more formalization.
33:44And so the way
33:46the phrase is being
33:47framed, which is a
33:48little bit of a cost
33:49of UPI versus free
33:50UPI, that's not the
33:52right way to frame
33:52it. It is actually
33:53about the alternative
33:54opportunity which
33:55merchants might choose
33:56to go with cash.
33:57And I, you know, and
33:58cash itself has a
33:59significant opportunity
34:00cost. For instance,
34:01suppose I withdraw
34:01to 10,000 rupees.
34:03It's not as if, you
34:04know, there are no
34:05costs because the
34:06cost of putting cash
34:07into the ATM, you
34:08know, maintaining it,
34:09all of those are, you
34:10know, implicit costs
34:11as well. So the
34:11opportunity cost has to
34:12be kept in mind here
34:13as well.
34:18So NetNet, you're not
34:19exactly a supporter of
34:22this MDR. You seem to
34:25be also believing that
34:28maybe this system, the
34:30existing system could
34:31have continued for
34:34longer because as you
34:35say, UPI is a mass
34:36phenomenon. And one of
34:37the reasons is it
34:38removed the cost and
34:39friction associated with
34:41digital transactions. So
34:43would you have liked the
34:44system to continue for
34:45longer?
34:46Not just continue. Let
34:48me make it very clear.
34:49Utilize this for credit
34:50creation. And I think
34:51here I must point out
34:53some important facts.
34:55I've covered this in my
34:56book, India at 100. If
34:58you look at the ratio of
35:00private credit to GDP in
35:01India, it is 60%
35:04thereabouts. The global
35:05average is 150%. There's a
35:07lot of credit that still
35:08can be created.
35:09Dr. Subramaniam,
35:11appreciate you and
35:12Santosh Barotra joining
35:14me here on the news
35:15today. Okay, let's turn
35:18to another big story. We
35:19are tracking the crisis
35:20in West Asia is now
35:22threatening to escalate
35:23out of control with a
35:25new front being launched
35:26this time between Saudi
35:27Arabia and the Iranian
35:29backed Houthis of Yemen.
35:31Saudi Arabia today
35:32claimed that it had shot
35:34down a drone that it
35:35alleged was heading
35:36towards the holy city of
35:38Mecca. The Houthi
35:39rebels of Yemen have
35:40rejected the charge. They
35:42claim that they are only
35:43attacking oil facilities
35:45in the kingdom. The
35:47Houthis now are
35:48controlling some of the
35:49key islands in the
35:51Babal-Mandeb Strait. On
35:53the back of what's
35:53happening in the
35:54Strait of Hormuz, West
35:56Asia's war is
35:57threatening to spiral out
35:58of control once again.
36:00Take a look.
36:08Massive escalation in West
36:10Asia. Dangerous provocation
36:15by Houthis. Drone
36:19intercepted near Mecca
36:21airspace. Saudi air
36:23defences intercepted a
36:25Houthi drone before it
36:26could enter restricted
36:27airspace over Mecca. Islam's
36:30holiest city has come under
36:31attack. An escalation that
36:36could plunge West Asia into
36:37full-out sectarian war. It's
36:41the first time the Houthis have
36:43targeted Mecca in nearly a
36:45decade since a ballistic
36:46missile was intercepted in
36:482017. The Houthis have denied
36:52the accusation insisting their
36:54targets were Saudi oil
36:55facilities and military bases.
37:01And there is no threat from
37:03Yemen to the holy sites. Our
37:04operations target the oil
37:05facilities and military bases
37:07which are entirely far remote
37:08from the sacred places.
37:14But the Saudis are up in
37:16arms. Saudi-led coalition in
37:19Yemen has warned the Houthis
37:21and stated that the security of
37:23holy mosque in Mecca is a red
37:25line. The Gulf Arab
37:27Kingdom's position is becoming
37:28more precarious by the day.
37:33On September 11, Houthis made
37:35significant gains along Yemen's
37:37western coast, captured Perim
37:39Island and tightened their grip on
37:41the strategic Bab al-Mandev
37:43Strait. Greater and lesser
37:45Harnish Islands and the Red Sea
37:47Port City or Mokka have also
37:50fallen to the Houthis. The
37:52kingdom's backbone, its very oil
37:54economy, is under serious threat.
37:56Last week, Iranian proxy in Iraq
37:59launched a drone attack and
38:00destroyed Saudi's east-west
38:02pipeline.
38:07The 1,200 kilometer carries
38:09around 4% of global oil
38:11supplies and enables Riyadh to
38:13bypass the Strait of Hormuz.
38:17With its oil lifelines under siege
38:20in holy cities now threatened,
38:22Saudi Arabia faces a stark
38:24dilemma, restraint or
38:26retaliation.
38:28And pressure is mounting on the
38:30kingdom for a firmer military
38:32response as the Houthi threat
38:34escalates.
38:36Bureau Report, India Today.
38:40And joining me now on that
38:42situation in Saudi Arabia that
38:45could once again have impact for
38:47India and the world is arguably the
38:51finest voice on that, on West Asia
38:53and the country, Ambassador Talmiz
38:56Ahmed, India's former envoy to
38:58Saudi Arabia, UAE, Oman and also the
39:00author of West Asia at War.
39:03Good to have you, Mr. Ahmed, on the
39:05show, how do you make sense of it
39:07for us about the attacks that we are
39:10seeing from the Iran-backed Houthis
39:12on Saudi Arabia targeting military and
39:16oil infrastructure?
39:18How do you explain it?
39:19Are we seeing a new front now
39:21emerging in this West Asia war?
39:24This is a very serious development.
39:27It is a threat to Saudi security.
39:30It is a threat to regional security.
39:34And it also is a serious threat to
39:36global energy security.
39:38This has emerged in a very unique set
39:42of circumstances when Saudi Arabia
39:44attacked the Sana airport in mid-July
39:48in order to prevent the landing of a
39:52Houthi aircraft, of an Iranian aircraft
39:54that was carrying a Houthi delegation.
39:57The aircraft landed at Hudaida, the other
40:00port, but the Houthis now thought and
40:05believed that the truce that had been put
40:08in place in 2022 was now over.
40:11They had used this period of four years to
40:15build up their own resources, their own
40:17military capabilities.
40:18Very quickly, in a lightning strike, they
40:21took the port of Mokha and then took the
40:26Perim Island at the mouth of the Bab al-Mandeb.
40:29And they have also taken Dohaad, which is on
40:31the Yemen coastline opposite Perim.
40:34They now control the Bab al-Mandeb.
40:36They have also started sending missiles
40:39into Saudi territory, mainly in the south.
40:43And several people have been injured.
40:45This is an extremely serious development
40:47government, because the Houthis now are now
40:51besieging Mareb province.
40:53Mareb is an oil-rich province.
40:56It also has a military base.
40:58It has a power station.
41:00And if all goes well for the Houthis,
41:03you might find that the government forces
41:05are no match for them.
41:07That would seriously change the power
41:09equations inside Yemen and indeed in the
41:12region as a whole.
41:13The Houthis are supportive of Iran,
41:16certainly, and the Iranians are also
41:19close to them, but they are not Iranian
41:21proxies.
41:22The war has been going on for about a
41:25decade, and they are an independent
41:27force.
41:28They don't listen to the Iranians, and the
41:31Iranians do not dictate to them.
41:32They have their own agenda in the region,
41:35and we now remain to see what are the
41:38likely implications over the coming days.
41:44So, let me come to two points from what
41:47you've said.
41:48One, am I right, therefore, that Saudi
41:51Arabia and indeed the region and possibly
41:53India also could face a two-straight
41:55problem?
41:56State of Hormuz already disrupted.
41:58Now you've got Babel Mandev under
42:00increasing Houthi pressure.
42:03How vulnerable does that make Saudi
42:05Arabia, which is dependent on this energy
42:07export model, if both the maritime
42:10checkpoints are choked and its alternative
42:13pipeline comes under pressure?
42:15Are we saying that now we have another
42:16choke point that could be emerging, which
42:19again could have impact on energy security?
42:23Both checkpoints closing down at the same
42:26time constitutes a very serious problem for
42:31global energy security.
42:33The Saudis have been using Yanbu port and the
42:37Babel Mandev choke point to supply about four
42:40million barrels a day of crude oil, mainly going to
42:44Asian markets like India and China.
42:47They do not have enough supplies now.
42:50So, if Babel Mandev is actually closed and Hormuz is
42:53shut already, you would have very serious difficulties with
42:58regard to the export of Saudi oil.
43:00This will create a serious energy crisis, at least in the
43:05coming days and weeks.
43:07We do not know how soon the crisis will be resolved and
43:11whether the Houthis are in a mood to accommodate Saudi
43:14interests and concerns.
43:16That remains to be seen.
43:18The Houthis have a grievance of their own.
43:21They believe that the recent conflict was initiated by the
43:26Saudis.
43:27They are also extremely upset about the war on Iran and the
43:32assassination of its supreme leader and many other
43:37important leaders.
43:38They are very concerned about the support that the Americans
43:41have given to the Israelis and the massacre of the
43:44Palestinians.
43:45So, they just don't have a domestic agenda in Yemen.
43:49They have a very significant regional grounds and I fear that
43:54they might escalate matters in coming days.
44:01The second point, of course, comes from all of this happening
44:04against the backdrop, Mr. Ahmed, of the so-called Mecca pact.
44:08The fact that Pakistan, Turkey had created this Mecca
44:12defense alliance.
44:13Guess what?
44:14Now, we are even hearing reports the Houthis have denied it that
44:18Mecca could be under attack.
44:20Now, explain that.
44:21Where does this leave this alliance?
44:23Completely in smithereens, it appears, even many weeks after it
44:27was forged.
44:29You are absolutely right to raise these concerns.
44:33Firstly, I must straight away say, I do not foresee any attack upon the
44:38holy city of Mecca.
44:40But at the same time, yes, we do need to speculate about the future of
44:47the Mecca security pact.
44:49My own sense has been, number one, that it is at a very early stage.
44:54It is principally concerned with issues that have emerged from recent conflicts
44:59and it is to bolster security vis-a-vis Israel.
45:05It is a very specific pact in that regard.
45:08It has very little to do with the Houthis.
45:11Obviously, if the Saudis continue to be attacked, they would not wish to
45:16distinguish between a long-term threat from the Israelis and an immediate
45:20assault from the Houthis.
45:22It is in this context that we have to wonder about the role of the other
45:27partners.
45:28Pakistan is very reluctant to get involved in this conflict.
45:32As you know that the Houthis are a Shia community, that they have their own
45:38grievances vis-a-vis the Saudis.
45:41These grievances go back 25 to 30 years.
45:44They have been excluded from the power structures of United Yemen, largely as a
45:49result of Saudi intervention.
45:51So this has nothing to do with the recent conflicts pertaining to Palestine and
45:56Iran.
45:56This is a much earlier conflict.
45:59Also, in 2016, Saudi Arabia had initiated military assault upon the Houthis and it
46:06inflicted a lot of damage upon the country.
46:08About 100,000 people have been killed and several hundred thousand people have been
46:14displaced.
46:14But the Houthis have held their own.
46:18They have not been militarily defeated.
46:20On the contrary, it would appear from recent events that they have built up their own capabilities.
46:26Can the Pakistanis intervene at this stage?
46:29You might see, and it makes no sense to me, I must say, but just to speculate, some bombardment
46:37by the Pakistani air force.
46:39That doesn't make sense because the Saudis have already been bombing the Houthis for the
46:44last 10 years and have gained nothing on the ground.
46:47The Americans and the Israelis have also bombed the Houthis between 2023 and 2025 and could
46:55not make an impact.
46:56And finally, the Americans had to enter into a ceasefire agreement with the Houthis.
47:01So bombardment from the air does not help.
47:04Does ground action help?
47:06I would remind you that over the last decade, the Saudis have not been able to dislodge the
47:14Houthis from the capital city, Sana'a, or from the port city, Hudaida, and from the other
47:19important city, Thais.
47:21And if the present action continues, the government forces that are confronting the Houthis, they
47:29might lose other territory as well.
47:30So I'm not going to say that the Pakistanis would really wish objectively to get into this
47:37quagmire.
47:42I want a quick final answer, sir.
47:44We are now seeing a potentially interconnected chain, Iran-U.S. confrontation with the Hormuz
47:49at the center of it, Houthi advances around Bab al-Mandeb, attacks on Saudi energy, the Saudi
47:58Turkey, Pakistan security arrangement, U.S. military involvement in the region.
48:03What is going to break this escalation cycle?
48:06Every time we think the situation is stabilizing, it escalates a quick answer.
48:10What will break this escalation cycle?
48:13This is a very simple point.
48:15The Americans are signally responsible for the extraordinary quagmire that we have in the
48:21region.
48:21They start conflicts, they have no agenda, they have no strategy, but they create massive
48:29death and destruction and disorder.
48:31So that is the first point.
48:33With regard to the Yemen issue, I would say straight away to you, the Saudis have no choice
48:39but to enter into discussions with the Houthis and to initiate a political process.
48:45It will be difficult because the Saudis have been supporting an alternative government.
48:49But the Houthis are now on top of things.
48:52They will demand a certain role in a reformed political order in Yemen.
48:58But I think that is where we will need to go.
49:01And possibly the Saudis are likely to initiate dialogue with them over the next few days.
49:07And we could see a resolution of this specific scenario over the next week or so.
49:12I do not wish to see a further escalation.
49:16The region is already in a mess and you don't want another front to open in the corner of
49:21the Arabian Peninsula.
49:26Let me leave it there, Talmi Zahimad.
49:28As always, erudite as ever, giving us the big picture, explaining and breaking it down
49:33for us.
49:34I appreciate you joining me here on the news today.
49:37Thank you so much.
49:38Thank you very much.
49:39I wish you all the best.
49:41Let's turn from there to tonight's Get Real India story, which comes from Katihar in Bihar,
49:46where floods have shut down schools across several parts of Bihar.
49:50But in Katihar, one teacher is making sure learning doesn't stop.
49:55What's the formula?
49:56Well, the classroom has moved from the school to a boat.
50:01Take a look.
50:12This is a primary school in Raghunathpur village in Bihar's Katihar district, among the worst
50:19hit by floods.
50:20While the school is shut, a private tutor has taken the initiative to ensure the learning
50:25does not stop.
50:27Mohammed Sahib conducts classes on a boat.
50:50The students claim their homes are also underwater.
50:55The school kids say their parents have allowed them to attend classes as the water is shallow.
51:02Why are you doing the泳?
51:04No, there is less water.
51:07And in the town there is water in the house.
51:09The frozen water, the road, the side, the passenger.
51:11Everything is water, so we see here.
51:14There are the seats here.
51:16There are no waters here.
51:17No, there is less water here.
51:18So I am scared.
51:21How long do you study it?
51:24About 1 to 1.5 hour.
51:34While the floods have derailed schooling in many parts of Bihar, in Raghunathpur,
51:39Mohammed Sahib has kept the light burning. With Bipul Rahul, Bureau Report, India Today.
51:46Okay, just about enough time left to leave you with our image of the day and it's a
51:50remarkable visual because the soldier canine bond taken to new heights quite literally.
51:57Take a look at these images. From brutes on the ground to paws in the sky, an Indian army
52:02paratrooper from the Surya command has carried out a tandem parachute jump with a dog handler
52:09and his combat canine carrying a full combat load. The army says the feat showcases trust,
52:16teamwork and combat readiness with the canine now trained for operations from the ground
52:22to the skies. We leave you with that image. Thanks for watching. Stay well, stay safe.
52:28Good night. Shubhraatari. Jai Hind. Namaskar.
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