The upcoming change to the Unified Payments Interface (UPI) has been all anyone can talk about for the past few days, and one of its loudest critics is BharatPe co-founder Ashneer Grover, who has spoken out strongly against it, saying, “To say that UPI fees will not affect consumers is merely a slogan. Petrol may be procured at Rs 40-50 a litre, but it is sold at Rs 100 after including excise duty and taxes. At the end of the day, it is the consumer who pays, whether it is a tax or any other charge.”
UPI has been in the news since September 15, 2026, when the National Payments Corporation of India (NPCI) notified a new Merchant Discount Rate (MDR) for UPI transactions. According to reports, from October 15, 2026, a 0.4% fee will apply to person-to-merchant UPI transactions above Rs 2,000, starting at Rs 5 and capped at Rs 300 per transaction for payments of Rs 75,000 and above.
For now, person-to-person transfers and merchant payments under Rs 2,000 remain free. Small merchants receiving under Rs 1 lakh a month via UPI QR codes are also fully exempt from these charges. For sectors like railways, telecom, insurance and fuel, the charge is a flat Rs 5 per transaction above Rs 2,000, regardless of the actual amount.
The stated justification is that UPI’s operating cost has risen to roughly Rs 20,700 crore, and the funds are needed for its maintenance and further expansion.
While the government has claimed this fee is for merchants and will not impact customers, many people don’t believe it, saying merchants will increase prices or refuse UPI payments to offset the additional costs. Either way, the burden would ultimately fall on customers, who would have to pay inflated prices or switch to cash.
Grover’s comments on UPI have gone viral, especially his remark that he has ‘never seen anything more stupid.’
What Did Ashneer Grover Say?
Speaking to Times Now, Grover said, “I find it quite amusing to watch all this because just when you think the government’s mistakes might have reduced, they seem to keep increasing. Let me make this clear: if I send Rs 1,000 to a friend through UPI, send Rs 1 lakh to a friend, or scan a QR code and make a payment of Rs 3,000, what is the cost of running the system in all three cases? It is the same.”
He further questioned, “If I am sending Rs 1 lakh to a friend, there is no charge. But if I make a payment of Rs 2,500 to a small shopkeeper, there will be a charge. What is the logic behind that?”
He also questioned the government’s reasoning behind these charges, saying, “Now let’s come to the argument that the government is incurring expenses. Where exactly are these expenses? I’ll give you the numbers. The RBI paid a surplus of Rs 3 lakh crore to the government in FY 2026. The RBI has also said that it has $30 billion in excess funds and asked the government to take it. All the banks that are the main participants in UPI made an overall profit of Rs 4 lakh crore in FY 2026. NPCI, which runs the payment network, made a pre-tax profit of Rs 1,900 crore in FY 2026. If nobody is making a loss, why are you asking the small shopkeeper to bear the cost?”
Grover added, “In India, retail margins are very low. If a shopkeeper earns a 12 per cent margin, that is a very high margin. In the US, a retailer earns 35 per cent and is willing to pay 2 per cent. Here, if a shopkeeper earns 12 per cent, where will he get 2 per cent from? Even 0.1 per cent, where will he get that from? I have never seen anything more stupid than this from the government.”
Read More: Are Indians Ready To Pay A UPI Transaction Fee?
Where Are Our Taxes Going?
Grover’s comments, though, have raised a much bigger, much messier question: if the government and the financial system are making this kind of money, where exactly is it all going? Because looking around at India’s roads, hospitals, schools and rivers, the honest answer seems to be: not very far.
1. Infrastructure That Keeps Collapsing
The recent string of fires and building collapses in Delhi alone has shone a spotlight on the poor state of the city’s infrastructure. It has also exposed the authorities’ glaring failure to ensure that property owners have proper paperwork and follow safety guidelines.
On September 6, a five-storey building housing a boys’ hostel collapsed in Satya Niketan near Delhi University’s South Campus, killing at least six people. The area’s cramped lanes and rampant, unregulated conversion of residential buildings into paying-guest accommodations had long been flagged as a risk, yet the Municipal Corporation of Delhi (MCD) issued vacation notices for several other “ruinous/dangerous” buildings in the same neighbourhood only after the tragedy.
In June, a B&B in Malviya Nagar caught fire, killing 21 people. Photographs from the property’s MakeMyTrip listing showed a stove and exposed pipelines in the room. The owner, Lokesh Bajaj, was also running it well over capacity, having turned a six-room licensed establishment into a 25-room commercial hotel with sealed windows and a single locked exit.
Residents also pointed to the narrow, congested lanes around the hotel, which kept ambulances and fire tenders from reaching the site in time.
Right before that, a five-storey commercial structure collapsed on the evening of May 30 near Saket Metro station in South Delhi’s Saidulajab locality. By the time rescue teams completed their operation, six people had lost their lives and at least 12 others were injured.
According to reports, police said that “prima facie, illegal construction work appeared to have been underway on the upper floors of the building for the past several months, due to which the incident took place”.
A police official said of the building’s owner, “Karambir owns multiple properties in Delhi, and usually lives off the rents from them. He allowed the construction of the additional floors despite knowing about the norms he was flouting.”
And it isn’t just Delhi. In 2024, it was reported that 10 bridges collapsed in Bihar within just 15 days.
2. Ambulance Response Gaps
The Satya Niketan collapse exposed something else too: how slow official emergency response can be. According to on-the-ground reporting, the local police station received a PCR call about the collapse at 1:34 pm. Yet paramedics in a Blinkit ambulance, booked through the quick-commerce company’s app, arrived about 10 minutes before Delhi Police, the fire brigade and the National Disaster Response Force (NDRF), and had already joined the rescue effort.
A Blinkit staff member involved in the response said that once the first ambulance arrived, they began calling in others stationed across the city, eventually bringing about nine more ambulances and 27 employees to the site over the next 90 minutes. Locals, students and shopkeepers ended up doing much of the early rescue work with their bare hands.
3. Law And Order On The Roads
As per the “Road Accidents in India – 2023” report released by the Ministry of Road Transport and Highways, India recorded 4.80 lakh road accidents in 2023 alone, claiming over 1.72 lakh lives. In 2024, some 4,87,707 road accidents were reported by the police departments of states and UTs in the country, claiming 1,77,175 lives and causing injuries to 4,71,441 persons.
The report also noted that national highways, just 2% of the road network, accounted for roughly a third of all deaths.
Experts point to a familiar list of failures: overspeeding contributes to nearly 70% of traffic deaths, licensing is often little more than an administrative formality with minimal real training, and enforcement still relies heavily on understaffed, overstretched traffic police using manual checks that are inconsistent and easy to evade.
Lawlessness on the roads is rampant too, with road rage and wrong-side driving now worryingly normal. Traffic lights often don’t work, and with traffic police in short supply, citizens themselves can often be seen standing in the middle of the road, directing traffic.
4. Cleanliness And Pollution
Take the Yamuna. Despite the crores spent over the years on clean-up efforts, the river remains severely polluted, with toxic foam caused by untreated sewage and industrial effluents covering its surface much of the time. As per reports, about 800 million litres of untreated sewage and 44 million litres of industrial effluent flow into it every single day.
Every season, government workers can be seen spraying defoaming chemicals onto the river’s surface as a temporary fix, a visual that’s become almost as routine as the pollution itself.
5. When Citizens Do The Government’s Job Better
Frustration with official cleanliness efforts has pushed ordinary people to take matters into their own hands, often with more visible results than the municipal bodies meant to be doing this work. Mumbai lawyer Afroz Shah became a global example of this after he began clearing plastic waste from Versova Beach by hand in 2015. Over the course of more than 98 weekends, his growing group of volunteers removed over 5 million kilograms of trash from the shoreline.
More recently, a 21-year-old student known online as “Bittu Tabahi” went viral for single-handedly cleaning the polluted Ajnar River near his hometown in Madhya Pradesh. His dramatic before-and-after footage pushed his Instagram following past 300,000 and even earned him a job offer from The Ocean Cleanup, a Dutch non-profit.
6. Where Is The Education Cess Actually Going?
India has charged a 4% Health and Education Cess on income tax since 2018, meant to fund school infrastructure, teacher salaries, mid-day meals and student loan support, among other things. Yet government schools are so distrusted that families routinely try to avoid them altogether, even those eligible for free seats in private schools under the Economically Weaker Section (EWS) quota.
Many would rather send their children to evening-shift classes at private schools than to a government school. This is despite the Right to Education (RTE) Act requiring private schools to have at least 25% of entry-level seats (Nursery, KG, Class 1) reserved for EWS and Disadvantaged Group (DG) students who are to attend regular daytime classes alongside general-category students.
There are also still extreme infrastructure issues at many government schools, including lack of clean drinking water, functional toilets, electricity, playgrounds, or even basic classroom maintenance.
These schools also face a severe staff shortage, with hundreds of thousands of teaching positions lying vacant. In August 2023, around 70 students were hospitalised after having their mid-day meal at Sarvodaya Bal Vidyalaya, Durga Park, in Delhi’s Sagarpur.
More recently, on September 17, the vice-principal and 15 students at Peddalodi Zilla Parishad High School, a government school in Telangana’s Sangareddy district, fell ill after being given leftover food from a private event hosted at Vice-Principal Venkatesh’s residence.
The food was brought over to the school and distributed by staff members to the students. According to reports, soon after eating it, the students “began experiencing symptoms including severe discomfort, vomiting and nausea.”
The students were then taken to the Government Hospital in Sadasivpet for treatment.
7. Health Facilities That Fail Patients
The poor state of India’s government hospitals is hardly news. For most people, they are a last resort rather than a first choice.
Over the years, several reports have highlighted how dirty and unhygienic government hospitals often are, not to mention understaffed, short of specialists and plagued by mismanagement.
In the Directorate General of Health Services (DGHS) scam uncovered by the Delhi Anti-Corruption Branch (ACB), the agency said, “As per the information received, the group allegedly promoted cartelisation, connived with government officers, manipulated government tenders and siphoned off government money to the tune of several hundreds of crores of rupees.”
The ACB also estimated the procurement fraud at the Central Procurement Agency (CPA) at Rs 600–700 crore, with everything from bed sheets and pillow covers to medical equipment and machinery allegedly bought at inflated rates through rigged tenders.
Meanwhile, a 2023 clip of Grover has resurfaced, in which he says the taxes people pay are essentially ‘charity’ to the country, since they get little benefit in return.
He said, “In India, you are taking 30-40% tax. People sitting in this room are paying a marginal tax rate of 30-40% at least. On Long Term Capital Gains, you pay 28%. Brother, your kid does not go to a government school. If you’re dying, you won’t go to a government hospital. And you are not getting any facility from the government that you are not paying for.
“The taxpayer is doing charity in the country. They are not getting any benefits. You tell me one thing: when you know that I will earn Rs 10 and Rs 4 will be kept by the government, out of the 12 months, you are working for the government for five months. Now in your life, how many years you have to be a slave for the government… and we have all accepted the way things are: ‘It is the way it is.'”
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8. Food Safety, Air Quality And The Officials Who Get Stopped
Air quality has been steadily worsening in many states, with Delhi regularly ranked among the most polluted cities in the world, at levels many experts describe as extremely dangerous.
The Food Safety and Standards Authority of India (FSSAI) has also been accused of not doing its job, leaving content creators like Food Pharmer and Trustified to bring transparency to the food sector for consumers.
The recent case involving Maharashtra’s FDA Commissioner Tukaram Mundhe, an IAS officer transferred roughly 25 times in two decades for his uncompromising style, and the Bombay High Court shows that even when officers try to follow the rules and enforce standards, higher powers put obstacles in their way.
So one really has to ask: where exactly are our taxes going, since they clearly aren’t working for us?
Image Credits: Google Images
Sources: Moneycontrol, The Indian Express, The Economic Times
Find the blogger: @chirali_08
This post is tagged under: upi, upi transaction, upi transaction fee, RBI surplus transfer, RBI surplus transfer government 2026, RBI, upi payment charges, upi payment charges news, upi payment charges new rules, upi merchant charges, upi merchant fee, upi mdr, upi mdr news, ashneer grover, ashneer grover upi, Unified Payment Interface (UPI)
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