A parliamentary committee has called on the government to accelerate the adoption of a calibrated merchant discount rate model for high-value digital transactions amid increasing transaction volumes and concerns over long-term sustainability of welfare schemes.
A parliamentary panel has urged the government to move quickly towards a calibrated merchant discount rate on high-value digital payments, arguing that the zero-fee model may no longer be sustainable as transaction volumes rise. The Standing Committee on Finance said the approach should help protect the long-term viability of the payments infrastructure while easing pressure on the public purse.
The recommendation revives a debate that has surfaced repeatedly since the Centre removed MDR on Unified Payments Interface transactions. In June 2022, the Parliamentary Standing Committee on Commerce said the government should reconsider that policy and consult payment companies, the National Payments Corporation of India and the finance ministry on a revenue model that could support the cost of processing digital transactions.
The committee also flagged concerns around welfare schemes that hold large sums without full deployment. It asked the Department of Financial Services, under the Ministry of Finance, to strengthen monitoring so that money is not left sitting unused in the Pradhan Mantri Vaya Vandana Yojana and the Atal Pension Yojana. The panel said it wanted a closer review of the long-term sustainability of defined-benefit and incentive-led programmes.
The warning comes after earlier scrutiny of the Atal Pension Yojana’s performance. In August 2025, the same committee expressed concern that only 29% of allocated funds had been used in 2024-25 and said outreach remained uneven, particularly in villages where fewer business correspondent outlets have made expansion harder. The pension scheme, overseen by the Pension Fund Regulatory and Development Authority, is meant to provide a fixed pension to workers in the unorganised sector. The Pradhan Mantri Vaya Vandana Yojana, launched in 2017 and later extended, is designed to give senior citizens an assured pension through Life Insurance Corporation of India-backed returns.
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