Road accident compensation is not limited to a technical system; it is deeply intertwined with the fundamental philosophy of the Indian Constitution—equality, dignity, and a welfare state. Millions of road accidents occur in India every year, resulting in the loss of life or permanent disability of thousands of people. In such circumstances, compensation is not merely financial relief, but also an attempt by the state to recognize the value of life and restore dignity to the victim. The current compensation system under the Motor Vehicles Act is primarily income-based, which may seem logical at first glance, but upon closer examination, it raises serious questions about constitutional values.
The “multiplier method” adopted in the Motor Vehicles Act determines compensation based on the victim’s income, age, and number of dependents. Its objective is to restore a family’s pre-accident financial situation, as much as possible. However, the biggest problem with this method is that it ties a person’s life to their marketability. The death or disability of a highly paid individual is met with compensation of lakhs or crores of rupees, while the amount for a daily wage laborer, rickshaw puller, or worker in the unorganized sector is meager. Thus, the law inadvertently conveys that a person’s life is more or less valuable in proportion to their income.
This approach directly challenges the principle of “equality before the law” enshrined in Article 14 of the Constitution. Article 14 not only calls for equal treatment, but also prohibits arbitrary and inconsistent classifications. When two citizens are victims of road accidents under similar circumstances, but their lives are valued differently based solely on their income, it creates a constitutional contradiction. On the one hand, the state treats all citizens as equal, while on the other hand, it discriminates between them based on their economic status in the level of compensation.
This system has the most severe impact on those whose income is not formally recorded or who are not considered ‘earners’ at all. Housewives, children, the elderly, and students often receive compensation based on ‘notional income.’ This notional income does not reflect their actual social contribution. A homemaker’s labor remains invisible within the home, but she plays a central role in maintaining the economic structure of the family and society. The Supreme Court has clarified in cases such as Kirti v. Oriental Insurance (2021) that a homemaker’s work has not only emotional but also economic value. Despite this, in practice, this contribution is still not adequately reflected in compensation calculations.
Another constitutional dimension of the income-based compensation system relates to Article 21, which guarantees the “right to life and personal liberty.” The Supreme Court has time and again clarified that life does not mean mere physical existence, but a life with dignity. When the value of a person’s life, after death or disability, is reduced to mathematical formulas and income slabs, it appears to undermine their inherent dignity. Viewing life solely through the lens of economic loss ignores the profound suffering, mental trauma, and social insecurity that the victim’s family faces.
In this context, it is also noteworthy that the concept of “just compensation” has been interpreted broadly by the Supreme Court itself. The Court has recognized that compensation should not only compensate for loss of income, but also for emotional damage, mental anguish, and uncertainty about the future. However, the current legal framework does not adequately address these intangible aspects. As a result, the compensation process often becomes a mechanical calculation, lacking human sensitivity.
This disparity becomes even more pronounced when compared to other transport laws. The Railway Act and aviation laws provide for uniform, fixed compensation in case of an accident, regardless of the victim’s income or social status. For example, a fixed amount is paid for death in railway accidents. This system recognizes that the right to safety and the value of life are equal for all citizens. The lack of such uniformity in the road transport sector raises the question of whether the ‘right to safety’ in India varies depending on the mode of transport.
In a welfare state, the state’s role should not be limited to resolving disputes through courts, but should actively ensure that every citizen receives a minimum degree of protection in life and death. In this regard, reform of the road accident compensation system is the need of the hour. First, a high and mandatory minimum compensation amount should be established, based on the principle of no-fault liability. This will ensure that every affected family, regardless of income, receives a respectable basic level of support.
Additionally, the contributions of non-earning groups must be realistically assessed. Compensation for housewives, children, and the elderly should consider their social, caring, and emotional contributions, rather than just hypothetical income. This reform would not only be a step towards gender justice but also more closely reflect social realities.
Periodic, automatic revisions of compensation amounts are also necessary to account for inflation and rising costs of living. Currently, the amounts of “notional income” and other traditional items remain unchanged for years, eroding their real value. A dynamic system that can adjust itself to economic conditions would be more equitable.
Furthermore, the compensation system should not be limited to payments only after death. Medical assistance immediately after an accident and cashless treatment are equally important. Timely treatment during the “golden hour” can save many lives. Cashless treatment schemes introduced in recent years are positive steps in this direction, but they need to be expanded and made more effective.
Ultimately, the question of road accident compensation is not just a matter of law, but also of morality and constitutional perspective. If we measure a human life solely by their income, we unwittingly legitimize social inequalities. A true welfare state is one that recognizes that every life is equally valuable, whether it’s a worker in a corporate office or a roadside laborer. Even if it’s not possible to eliminate income-based calculations altogether, they should at least be balanced with equitable, dignified basic compensation.
Thus, subordinating the “arithmetic of loss” to the “ethics of justice” would be in keeping with the spirit of the Indian Constitution. Such reforms to the road accident compensation system would not only reinforce the values of Articles 14 and 21, but also deepen citizens’ trust in the state. A system that accords equal respect to every life would be the hallmark of a truly democratic and welfare India.
