Amritsar rail tragedy is a wake-up call for govt to stop doling out ex gratia payments.
Less than two weeks have passed since the horrific tragedy near Amritsar where 59 of the people celebrating Dussehra on railway tracks were killed, and over a 100 more injured, by a passing train. Yet, like many other such tragedies in India, it has already disappeared from public discourse.
A simple analysis using Google Trends shows that interest in the Amritsar tragedy peaked on 20 October, a day after the accident, and sharply declined over the next few days. In fact, by 23 October, searches for Amritsar tragedy fell below that for “Narendra Modi”, indicating that Indians had moved on. Just for context, more people were searching for “Virat Kohli” than for the accident in a mere two days after its occurrence. If we always knew that we, the people, didn’t care much for the loss of lives in accidents, we now have nice charts to show for it. The people affected, their loved ones, the citizens of Amritsar and the people of Punjab will, in decreasing order of time, remember the tragedy. The rest of us will move on.
There is a moral judgement to be made here about India as a society and Indians as individuals. But I will focus on something more tractable: Why a majority of deaths are avoidable in India, particularly in rail and road transport accidents. This might not directly apply to the tragedy in Amritsar, but nevertheless offers food for reflection.
In my view, the biggest hurdle to improving the safety of our transport sector is the government system of dispensing ‘ex gratia’ payments. The dictionary defines this as a payment “done from a sense of moral obligation rather than because of any legal requirement”. The Union government currently gives Rs 2 lakh ex gratia to the families of those killed in such accidents. State governments often give more, and Punjab initially announced Rs 5 lakh per family, before announcing enhanced ex gratia payments based on the socio-economic status of the victims. Chief minister Amarinder Singh might have been motivated in this extra generosity by Sukhbir Singh Badal, who demanded that the state give a whopping Rs 1 crore to the bereaved families.
Note that none of these payments is compensation. After the Modi government doubled compensation rates in 2016, Indian Railways now has to pay Rs 8 lakhs per death, and between Rs 64,000 to Rs 8 lakhs per injury, depending on the seriousness. But according to its latest annual report, Indian Railways paid out only Rs 3 crore in 2016-17, during which 238 people were killed and 369 injured, a lot less than what it is obliged to. Before you cry foul, remember that the Indian Railways (like the government) uses cash accounting, which does not capture future liabilities. It also means that the compensation paid by the Indian Railways takes a really long time to be processed. The annual report doesn’t mention what the average time for processing and giving compensation is.
Ex gratia payments are perhaps disbursed more quickly, which would be a real relief for accident victims and their families. What is unmistakable though, is that these payments have become political instruments for those in power to (genuinely) demonstrate concern for the unfortunate victims. Yet, even without taking away the smallest bit of sincerity from the ministers’ intentions, ex gratia payments are counterproductive to improving safety.
The case for governments to use public funds to compensate participants in private transactions is weak. A railway journey is a private transaction between the passenger and the railway company (even one owned by the government). If there is an accident, then it is for the railways to compensate the passenger, and for the passengers to protect themselves through insurance.
Indeed, insurance is the vital link towards improving safety, and insurance premiums are the indicators of risks.
Few Indians buy insurance for anything, making us among the lowest insured countries in the world. Passengers who expect ex gratia payments in case something untoward happens have weaker incentives to purchase insurance. In the case of a derailment of a train near Kanpur in 2016, only 128 of the 695 passengers were found to have opted to insure themselves for Rs 10 lakh, at a premium of less than a rupee! (The families of the deceased got Rs 5.5 lakh from the Union government, Rs 5 lakh from the Uttar Pradesh government or Rs 2 lakh from the Madhya Pradesh government.)
The Modi government made insurance mandatory and free for online bookings after that, and in September re-introduced an opt-in scheme costing a mere 68 paise per ticket.
My fear is that as long as ex gratia payments can be expected, and unless insurance is offered as an opt-out, it’ll take a long time for Indians to get into the habit. At the same time, without the discipline imposed by insurers and reinsurers, Indian Railways will lack real incentives to improve safety. (Insurers tend to put pressure on providers to improve safety and thus reduce claims.)
The people who died in Amritsar were not passengers and technically were trespassing on the tracks. Towards the very end of the Indian Railways’ statistical publications is a table that shows that 1,091 trespassers were killed by trains in 2016-17, a lot more than the 238 passengers who died in accidents. In fact, including trespassers, 2,511 people died under the category “unusual occurrences resulting from the movement of trains” other than accidents, including 475 passengers, 42 staff, 46 suicides and 857 “others”. The Indian Railways may not be liable for all such deaths and injuries, but it really ought to take third party insurance to cover potential claims.
Improving transport safety requires sustained public debate. This doesn’t happen because most of us think that once those ex gratia payments are announced, the matter is closed and we can move on. Until the next accident.
Nitin Pai is director of the Takshashila Institution, an independent centre for research and education in public policy.