Mains Answer Writing - 8 Aug, 2026

GS3

Economy

15 marks

UPI has emerged as a critical Digital Public Infrastructure, but its zero-charge model raises concerns over the financial sustainability of the payments ecosystem. Examine whether UPI should continue to remain free.

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Tips for your answer

Distinguish between UPI being free for users and the payment ecosystem being cost-free; banks, NPCI and fintech intermediaries still incur substantial infrastructure and operational costs.
Remember zero MDR on UPI merchant payments since 2020, NPCI, RBI, the government's incentive scheme for low-value BHIM-UPI transactions and UPI's dominance in India's retail digital payments.
Do not take an absolute position that UPI must either always remain completely free or become chargeable. Examine the trade-off between financial inclusion and the sustainability of payment infrastructure.

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