Recent Controversies About Ex-Gratia Payments

February 22, 2025

The recent ex-gratia compensation disbursal to the families of victims from the New Delhi railway station stampede has sparked debate. The Ministry of Railways provided cash payments of Rs 10 lakh to the next of kin of the deceased. This raised questions about the appropriateness of cash payments in such situations.

What Are Ex-Gratia Payments?

Ex-gratia payments are voluntary payments made by an entity out of moral obligation.
They are not legally required and do not imply liability.
Such payments are often made after tragic events.

Ex-Gratia vs. Compensation

Ex-gratia payments arise from goodwill. They do not involve admitting wrongdoing. Compensation, however, is a legal requirement. It is aimed at reimbursing losses incurred due to negligence or harm. About this distinction is crucial in evaluating the government’s role in disaster response.

Current Practices in Ex-Gratia Payments

While cash payments are not the norm, they can occur in urgent situations. The Railway Board’s 2023 guidelines suggest a maximum cash disbursement of Rs 50,000 for immediate needs after train accidents. The remaining amount should ideally be transferred via bank methods for accountability.

Cash vs. Bank Transfers

Cash payments can be convenient in emergencies. However, bank transfers provide better transparency and documentation. Legal experts generally prefer bank transfers for their traceability. The government maintains records of cash distributions, but the lack of a paper trail can raise concerns.

Government’s Justification for Cash Payments

Railway officials defended the cash disbursal by stating that ex-gratia payments differ from compensation. They cited past instances where cash was used, such as in the Balasore accident. Officials argued that cash disbursement was necessary due to victims’ limited access to banking facilities.

Historical Context of Ex-Gratia Payments

The Delhi government has established structured guidelines for ex-gratia payments, particularly during the Covid-19 pandemic. These guidelines included eligibility criteria and a direct benefit transfer system. Documentation was required to ensure proper disbursement, denoting the importance of transparency in government payments.

« Previous Post Next Post »