FM: Country’s digital payments system an ‘envy of the world’

Union finance minister Nirmala Sitharaman hailed India's digital payment system as a global success at the Eighth International Tax Conference in Bengaluru. The minister pointed to NPCI's impressive statistics, describing the system as "an envy of the world." The remarks came after the government faced opposition over a new UPI fee framework.

The changes introduce a 0.4% Merchant Discount Rate on transactions above ₹2,000, while smaller payments and person-to-person transfers remain unaffected. The government claims the framework supports financial sustainability. Congress criticized the move as a step towards imposing a UPI fee. Sitharaman, however, focused on the scale of digital payments, urging more widespread adoption among consumers and businesses.

She highlighted that despite infrastructure expansion, some small shops still prefer cash. Sitharaman emphasized that tax policy should consider the impact on investment and economic activity. She explained the government's tax approach aimed at simplifying compliance and preserving enforcement for genuine cases. Sitharaman also discussed tax reforms, such as rationalizing TDS and TCS provisions, raising thresholds, and abolishing criminal consequences.

The minister stressed the importance of digital companies, virtual digital assets, cloud services, and cross-border transactions in future investments.