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Wednesday, Aug 21, 2002

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UTI and US-64

With the Finance Ministry planning to revamp the Unit Trust of India (UTI), the Group of Ministers' (GoM) only option is to keep US-64 unit holders glued to the scheme through tax breaks. The scheme is scheduled to come to a close by May 2003. The Centre ought to honour all the commitments made towards the US-64 and provide financial assistance to the sponsors for any shortfall in the repayment of the matured sums. There is the possibility of all unit holders exiting from the scheme in May as the Government guarantee of 10 paise additional repurchase price every month runs out. Despite the Finance Ministry asking sponsors to devise ways to keep the scheme afloat, the GoM has reason to worry about an offloading. The UTI would have to go in for sale of securities to meet the redemption requirement.

Nooruddin

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