Over 120 people have been killed in the train accident in India, after a passenger train derailed. 14 boogies carrying over 500 passengers of Indore-Patna express smashed into each other, resulting in a massive pile up. The death count is expected to rise as several victims are critical. The accident occurred at 3:00 AM in the morning, about 100 KM away from Kanpur town.

Indian Railway Minister Suresh Prabhu has announced an ex-gratia of three hundred  and fifty thousand Indian rupees (approx. $5000) for the kin of the deceased and fifty thousand (approx. $850) for the severely injured.

The Challenge of Budget Constrained Indian Railways

There are numerous reports in Indian media regarding safety up-gradation of Indian Railways, however the plans have never materialised. Indian Railways is a monopoly, fully owned by Indian Government. Indian Railways is one of the largest employers in the world. Previous attempts to privatise part of Indian Railways has faced stiff resistance from political parties and employee unions. Indian Railways continue to run into losses due to populist policies of successive governments. At the same time, due to budget constraints, Indian Railways is unable to upgrade to newer International safety standards.

As per Indian media sources, Indian Railways is currently facing numerous challenges. For upgrading the Indian Railways to International Safety Standards would cost over $137 billion. If the government invests this amount of funds in upgrading the railway system, then the ticket prices will drastically rise, resulting in massive public outrage. There are few who pointed out the unit economics of accidents in India. Typically less than 3 Train accidents happen in an year across India, where Government of India shells out $3-5 million in ex-gratia to the victims. This compared to multi-billion investment in upgrading the entire railway system to international safety standards is often debated in the closed doors within government bureaucratic circles.

[Image courtesy: TV5 News]