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Wednesday, July 27, 2016

Why Indian Railways considering charging of insurance premium from passengers?

Why Indian Railways considering charging of insurance premium from passengers?

It seems Indian Railways is considering introduction of a nominal fee for covering the risks against accidents and luggage. If we look at the past statistics, most of the accidents and stealing of luggage of passengers is due to the inefficiency of the railways. To an estimate, more than 80% of the accidents are occuring because of human failure. Similar is the view about luggage being stolen. The railways need to ensure that the travel by unathorised passengers (main cause of the stealing of luggage) do not travel in the reserved coaches. TTE has been failing in their duties to check on such lapses, the prominent being from the angle of corruption.

Number of supporters of the present Government are making grounds for charging of nominal fee of Rs. 2/- per passenger as insurance premium to cover for such risks.

Now the question comes as to why the passenger be made to pay for insurance premium. It is appreciable that Indian Railways is in the service of transportation both passengers as well as goods. As far as nature of business of Indian Railways is concerned, it is on the same platform as that of Airlines, Buses, Delhi Metro, Local suburban trains of Mumbai and so on. Under various Acts, the transport vehicles are to be duly insured for which insurance companies are charging premium from the owners and cover the risk which of-course includes accidents, 3rd party insurance etc. Any business on account of charging fee for insurance premium would also promote other transporters to have similar repercussion. It is the prime responsibility of any transporter to ensure safety of passengers, goods and other users.


There have been several post on the public domain advocating for introduction of insurance for passengers and luggage. Citizens have been suggesting charging of Rs. 2/- per passengers as insurance premium to cover risks of passengers and luggage. It seems there is some ground work being done under some political agenda.

While to some of the posts, I have expressed my views on the issue, the main point is not being responded to. The Indian Railway is also a transporter and it is the prime responsibility of the transporter to provide the services duly insured including safety of passengers and the luggage. It is also surprising that Railways want to burden the passengers for their own inefficiency. As an example, the luggage is stolen because of unauthorized traveling in the reserved coach. It is the prime responsibility of the employee i.e TTE to ensure that no unauthorized boarding take place. However TTE have laxity in performance of their duties one because of laxity and 2nd because of unauthorized income.

It seems the present Govt. is working as Marketing Executive/ Insurance Agents for insurance companies. It is estimated that on an average more than twenty million passengers travels daily using Railway as mode of travel and if Rs. 2/- is charged from each passenger, it ensures a revenue of Rs. 40 Million daily for insurance company. This is equal to Rs. 1,4600 Million annually.

Now a published report indicates some revealing facts which I am bringing herein:

1.       Total Number of passengers killed from 2009-10 to 2013-14 : 502
2.       Total Number of passengers injured from 2009-10 to 2013-14 : 1531
3.       Total amount of compensation paid (in Rs. Lakhs) : 1816

The above data is for the period of 5 years and therefor the total revenue generation would be Rs. 14600 Million  x 5 yrs = Rs. 73000 Million as against a compensation paid of Rs. 180 Million during last 5 years
Is it the Govt. of India working as marketing agents of the insurance companies? Is there any hidden understanding specially keeping in view opening of FDI in Insurance sector?

In view of above, I feel Indian Railways or Ministry of Railways not to promote insurance business and restrict itself in discharge of its service obligations which includes safety of passengers and their luggage else the other operators like Airlines, Buses, Metros, Local Sub-urban trains would also resort to such unethical business practices.

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