Kushinagar accident: The train was on way to Gorakhpur from Siwan.
Scores of people are killed in accidents at unmanned railway crossings in India every year.
As Uttar Pradesh Chief Minister Yogi Adityanath on Thursday faced angry protests during his visit to Kushinagar, he asked protesters to stop the drama.
The unmanned railway crossing is one of the major problems of India where many Indians lost their lives.
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Railway Minister Piyush Goyal said an inquiry had been ordered and his ministry would pay 200,000 rupees ($3,000) to the families of those killed. He also announced an ex-gratia of Rs two lakh each to the families of the deceased.
An official said the Chief Minister had ordered that school vans across the state be checked on whether they were following the safety guidelines or not.
An accident relief medical train from Gorakhpur was dispatched to the site, the NE official said.
The bus driver, who also died in the collision, had ignored a rail guard's stop signal and there are unconfirmed reports he had headphones on and was listening to music when the accident happened. "Note, what I am saying", Yogi Adityanath said, seen to be ordering the protesters to back down.
Twenty-seven people, including 23 children, died on April 9 when a school bus fell into a gorge in the northern state of Himachal Pradesh.
At least 13 school children were killed and eight others injured after a train hits a school bus in Uttar Pradesh's Kushinagar district.