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The UTI mess

S. Madhavan, e-mail

The article ``MIPs: Another UTI bombshell?'' (Business Line, August 19) is revealing and shocking. The former Finance Minister, T. T. Krishnamachari, would have never thought that his novel idea of mobilising public funds for the welfare of the people un der the corporate name Unit Trust of India would come to this tragic pass.

Even on a conservative estimate, the UTI's cumulative loss of more than Rs 10,000 crore is almost twice the country's average budgetary deficit.

If an industry makes a loss disproportionate to its assets and reserves base, it is termed sick. If the same yardstick is applied to the UTI, where the Development Reserve Fund stood at Rs 1,100 crore in June 2000 and its liability more

than Rs 6,000 crore, is it not logical to call it a sick unit?

Since the immediate future of the stock market appears not so bright, the Centre should take every step to repay the investors as early as possible and help them come out of this mess so that it can save the crores of rupees being spent on establishment expenses. Also, it is not advisable for the UTI or any other government-managed financial institution to indulge in stock market activities afresh, at least for five years from now.