Dear Modi, Fund UPI, Not Pilgrimages
Prime Minister Narendra Modi deserves enormous credit for presiding over one of India’s most successful pieces of digital public infrastructure. UPI has changed how this country transacts. From the vegetable vendor and autorickshaw driver to the neighbourhood kirana shop, restaurant, professional and large retailer, scanning a QR code has become almost instinctive. In FY 2025-26 alone, UPI processed more than 24,000 crore transactions. This is not some niche fintech product anymore. It is part of the economic plumbing of India, and its success lies partly in the fact that people barely have to think before using it.
That is why the government’s recent statement on possible Merchant Discount Rate charges deserves scrutiny. The Centre has assured consumers that UPI payments and person-to-person transfers will remain free, while saying that a nominal MDR, if introduced, would apply only to a limited category of merchant transactions above a threshold. That assurance is welcome, but the principle needs challenging before the exception slowly becomes normality. A charge on a merchant does not disappear into thin air. Eventually, businesses recover costs through prices, minimum transaction limits or changed payment behaviour. Before asking anybody in the UPI ecosystem to pay another charge, the government should first ask whether it is spending taxpayers’ money on things government has no business financing.
UPI Is Infrastructure, Not Another Toll Booth
The Union Budget already provides ₹2,000 crore in 2026-27 for incentives promoting RuPay debit cards and low-value BHIM-UPI merchant transactions. That is public money being used for an extremely broad economic purpose: maintaining and expanding a payments ecosystem used across class, religion, geography and profession. If maintaining zero-MDR UPI requires greater support, the first response should be to examine expenditure elsewhere rather than treating India’s enormous transaction volume as another potential revenue pool.
There is a bureaucratic temptation to look at billions of transactions and calculate how much money even a tiny charge could generate. Political leadership should look at those same billions of transactions differently. Every one represents economic friction that India successfully eliminated. UPI became revolutionary precisely because a ₹20 payment did not require the payer or shopkeeper to calculate whether the transaction was worth the fee. Turning that achievement gradually into another collection mechanism would be an extraordinary own goal for a government that has spent a decade proudly selling Digital India to the world.
Start By Getting Government Out of Pilgrimages
Here is one obvious place to find money: stop using Central Government funds for religious pilgrimage and pilgrimage-oriented expenditure that goes beyond essential state functions. Apply the principle without fear or favour. Hindu, Muslim, Christian, Sikh, Buddhist or Jain — the religion should make absolutely no difference. Faith is personal. The taxpayer should not be responsible for making anyone’s pilgrimage cheaper, grander or more comfortable.
The Modi government has already demonstrated that this can be done. The Central Haj airfare subsidy was abolished from Haj 2018. The sky did not fall. Muslims continued performing Haj, while government resources could be used elsewhere. The same logic should now be applied universally. If abolishing a Muslim pilgrimage subsidy was defensible on grounds of fiscal responsibility and equality, then a Hindu pilgrimage cannot become entitled to public money merely because Hindus constitute the majority.
Security Is Necessary; Subsidising Faith Is Not
This does not mean government should abandon religious gatherings. The distinction is straightforward. If lakhs of Indians attend the Amarnath Yatra, Kumbh Mela or another major religious gathering, police, disaster management, emergency medicine, crowd control and national security remain legitimate governmental responsibilities. The state protects citizens whether they are attending a temple festival, cricket match or political rally. That expenditure cannot simply be labelled a religious subsidy.
But infrastructure explicitly designed to enhance pilgrimage is another matter. The Union Government’s PRASHAD scheme exists specifically to develop pilgrimage and spiritual destinations. The 2026-27 Budget allocates ₹245 crore to PRASHAD, while 54 projects worth about ₹1,727 crore have been sanctioned under the programme over time. Swadesh Darshan also contains substantial religious and spiritual-tourism expenditure among its wider tourism projects. These schemes may produce tourism benefits, but when public finances are supposedly tight enough to contemplate charging parts of the UPI ecosystem, every such expenditure deserves re-examination.
This frustration does not exist in isolation. Indians already live with taxation embedded throughout ordinary economic life. Petrol and diesel remain outside GST and carry Central excise duties alongside state-level taxation. Then there is income tax for those who earn enoThe Indian Taxpayer Is Already Carrying Enoughugh to pay it, GST across consumption, road tolls, stamp duties, vehicle taxes and a long catalogue of charges imposed at different stages of economic activity. The precise tax component of fuel varies by product and state, which is why simplistic claims that everything above ₹40 is tax should be avoided, but the larger point remains: the taxpayer already feels squeezed from multiple directions.
Government economists can explain that an MDR of a few basis points is tiny. A small businessman experiences the world differently. He sees electricity costs, fuel, rent, GST compliance, banking charges, salaries and dozens of other expenses accumulating simultaneously. Governments lose touch with voters when they analyse each additional burden in isolation and conclude that it is affordable. People experience the cumulative bill.
BJP Voters Are Supporters, Not Hostages
And this is where the BJP should be especially careful. Many Indians who strongly dislike Rahul Gandhi’s politics and do not want Congress returned to power are nevertheless perfectly capable of being angry with the Modi government. Opposition to Congress is not an unlimited political credit facility for the BJP. A voter can believe Narendra Modi remains the better Prime Minister while also telling him that his government is wrong.
That distinction matters because political dominance can breed complacency. Core supporters should never be treated as captive voters who will tolerate every tax, surcharge or fee because the alternative appears worse. They can abstain, disengage, punish governments in state elections or simply become less enthusiastic about defending decisions they consider indefensible. A government that genuinely listens should correct course before resentment reaches that stage.
Prime Minister, Make the Choice
So before bureaucrats decide that India’s extraordinarily successful payments network must generate another stream of charges, make them search the expenditure side first. Audit pilgrimage spending. Remove subsidies and discretionary religious facilitation regardless of faith. Preserve security, sanitation and genuine public infrastructure, but let believers and religious institutions pay for religious activity themselves. Then examine the hundreds of other schemes where taxpayer money is being spent because governments have historically found it easier to create programmes than terminate them.
UPI represents exactly the kind of public infrastructure government should prioritise: universal, productive, secular and economically enabling. A pilgrimage is a personal choice. A national digital payments network is economic infrastructure used by almost everyone. When resources are limited, choosing between the two should not be difficult.
Prime Minister, let citizens pay for their own pilgrimages. Use government money to keep the infrastructure serving 1.4 billion Indians cheap and accessible. We voted for Digital India. We did not vote for Digital India with another charge attached.
