Exempt Small Retail Traders from MDR Charges, Just Like Corporate Companies: Annamalai
Udupi: The Central Government should exempt small retail traders from Merchant Discount Rate (MDR) charges on UPI transactions, just as corporate companies receive tax exemptions, former IPS officer K. Annamalai said.
Speaking at an interaction programme at Town Hall in Udupi on Saturday, Annamalai said the government should strike a balance when deciding on MDR charges for merchant transactions through UPI. He argued that the Rs 15,000 crore expected to be collected through these charges was relatively insignificant for a Central Government presenting a budget of Rs 50 lakh crore. He called for small retail traders to be granted an exemption.
“In a democracy, the government cannot introduce schemes that satisfy everyone. Sometimes, government decisions can also be wrong. Regardless of which political party we belong to, if a government policy affects us adversely, we must oppose it. That is a sign of a healthy democracy. Just as we think carefully while casting our votes, people should set aside party differences and unite when government policies create problems for them,” he said.
Annamalai said small retail businesses across the country were facing a gradual decline and urged the government to take the issue seriously. He also expressed concern over foreign investment exceeding 50% in some large companies, describing it as a potential risk. He said foreign companies were entering the Indian market partly because domestic businesses were not sufficiently established and warned that this could pose challenges to national security in the future.
Annamalai said municipal bodies and corporations across the country were poorly managed and often lacked adequate funds for basic services such as sanitation. He argued that politics should focus on responsible governance rather than competition over announcing freebies.
He said Karnataka’s development should not be concentrated in Bengaluru alone, but should extend to other districts, including Udupi.
“Instead of focusing only on becoming Chief Minister or MLA, we should first elect capable leaders to local bodies. They must understand the importance of public safety, healthcare and sanitation in their respective areas,” he said.
He called for a competitive political culture in which party workers highlight the development work undertaken by their governments in individual wards and villages rather than merely putting up posters announcing the arrival of the Chief Minister.
Annamalai observed that despite the educated and enterprising population of Udupi district, major companies were not establishing significant operations in the region. He urged elected representatives to make greater efforts to develop Udupi into a knowledge hub.
Annamalai said small retail businesses generated local employment, strengthened community ties and contributed to the economic development of local communities.
“Everything in this country cannot be measured only in terms of money and taxes. People’s livelihoods are equally important, and the government must pay attention to them,” he said.
He argued that small retailers played an important role in sustaining local economies, while profits generated by large corporate companies with foreign ownership could flow out of the country. He described this as a potential long-term concern and called for stronger support for small traders.
He also urged the Union Finance and Commerce Ministers to work together to develop a coordinated approach to address the concerns of small businesses.
“Six years have passed since the Prime Minister announced the ‘Make in India’ initiative. Now, the country should move towards the concept of ‘Make for India’,” Annamalai said.
Citing China as an example, he said the country had achieved substantial economic growth by strengthening domestic manufacturing, making it better equipped to withstand external pressures, including those from the United States.
He emphasised the need to strengthen domestic production and urged the public to initiate discussions on the issue. Greater public debate, he said, would encourage the Central Government to take the concerns seriously.
