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Context:

Railways' decision to pay ex-gratia payments of Rs 10 lakh in cash to the families of New Delhi stampede victims has sparked debates.

About Ex-Gratia Payment

Ex-gratia payments are voluntary, goodwill-based distributions made by the government or public authorities without legal obligation.

They are distinct from compensation, which is legally mandated to redress harm (e.g., for negligence or liability). For example, ex-gratia payments are usually made after natural disasters or tragedies to provide immediate relief without admitting fault.

Why Was Cash Used in This Case?

Immediate Relief

The Railways justified the cash disbursement by mentioning “extraordinary circumstances,” arguing that victims’ families might lack bank details or face delays in accessing funds. A senior official stated, “People usually do not carry bank details... Seeking such documents would have delayed the ex-gratia”.

Precedent

Officials noted that cash was also used in the 2023 Balasore train accident, though the 2023 Railway Board guidelines mandate that only up to Rs 50,000 be given in cash for “immediate relief,” with the remainder transferred via bank.

Verification

Payments were made after verifying Aadhaar cards to establish heir-deceased relationships, ensuring accountability.

Legal and Procedural Context

2023 Railway Guidelines

Specify that cash payments are limited to Rs 50,000 for initial relief, with the rest disbursed via cheque, RTGS, or digital modes. The Railways argued this rule applies to “normal incidents,” not “tragic” events like the stampede.

Past Practices

During the COVID-19 pandemic, the Delhi government used Aadhaar-linked Direct Benefit Transfer (DBT) for ex-gratia payments, requiring bank details and documents like relationship certificates.

In March 2020, the Delhi government’s relief branch revised ex-gratia scales for disasters (e.g., fires, riots), stating that part of the payment could be given “immediately” but did not specify the mode.

Way Forward

The absence of strict government guidelines on ex-gratia disbursement allows for discretion, potentially leading to inconsistent practices.

Experts suggest codifying clear rules for ex-gratia payments to balance immediacy with transparency, such as hybrid models (partial cash + digital transfers) or mandatory digital payments.

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Source: 

INDIAN EXPRESS