Railways likely to provide accident insurance to passengers
The railway ministry is working towards providing accident insurance to passengers, officials said on Wednesday, a move which could see the end of complex procedures for payment of compensation by the public sector giant which ferries around 23 million people daily.
Senior officials in the ministry said railway minister Suresh Prabhu has proposed farming out the job to public sector insurance companies.
“The New India Assurance Company has agreed to partner with the Indian Railways. In all likelihood, a policy statement on the matter will be made by the railway minister in his upcoming budget speech,” a senior ministry official said.
As of now, travel on the Indian Railways’ 64,500-km network is not insured and compensation to accident victims or their families is given on the basis of decrees from 21 benches of the Railways Claims Tribunal spread across the country.
Railways ministers also award compensation amounts out of their discretionary funds.
Officials admitted that the present system was riddled with corruption.
“Compensation claims departments across different railway zones have turned into breeding grounds for corrupt practices on account of the involvement of unscrupulous agents and local mafia, while families of genuine accident victims are left to fend for themselves. The existing system serves nobody except those with vested interests,” the official said.
The Indian Railways – whose daily passenger number equals the populations of Australia and New Zealand put together – had also faced allegations of being insincere and lax in payment of compensation.
Following a public interest litigation filed by two advocates -- Setu Niket and Isha Majumdar -- the Delhi high court last month directed the Railways to raise the compensation amounts, last reviewed in 1997.
If implemented, the move would mean big business opportunities to insurance companies.
Even if only the estimated 1.2 million reserved category passengers are insured, the business could be worthwhile for the insurance companies, ministry officials said.
“To begin with, the insurance surcharge on passenger tickets is likely to be made optional,” an official added.