Parliamentary committee calls for a tiered revenue framework for India’s Unified Payments Interface to ensure long-term financial viability, amid record transaction volumes and ongoing government subsidies.
A parliamentary committee in India has urged the government to consider a self-sustaining, tiered revenue framework for the Unified Payments Interface so the fast-growing digital payments system does not remain dependent on repeated budget support, according to reporting by The Economic Times. The panel said the current model leaves a sizeable gap between the cost of running the network and the money set aside to support it.
The committee noted that UPI could eventually handle as many as 150 billion transactions a month and add 600 million users, but said the government’s incentive support covers only a small share of the industry’s actual costs. It said the current allocation meets just 11% of those costs and 14% of possible merchant discount rate collections, leaving the ecosystem short of funds for long-term investment, according to the report.
At the same time, the finance ministry has said there are no plans to impose transaction charges on UPI payments. In Parliament, Minister of State for Finance Pankaj Chaudhary said the law bars banks and payment system operators from levying charges on specified electronic payment modes, including UPI. That stance reflects the government’s long-running effort to keep UPI free for users even as it absorbs the bill through incentives.
The issue has sharpened as UPI usage continues to climb. Government incentives worth ₹8,730 crore have helped support the system, while July 2025 set a record with nearly 2,000 crore transactions, according to local reporting. Industry estimates cited by payment-sector commentary suggest the state subsidy covers only part of the processing cost, which has revived debate over whether India can keep the zero-fee model in place without weakening investment in infrastructure and innovation.
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