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UTI-II privatisation to take five years, Jaswant tells JPC

Subhomoy Bhattacharjee in New Delhi

Finance Minister Jaswant Singh has informed the joint parliamentary committee on the stock scam that the government will take five years to privatise Unit Trust of India-II.

The comment by Singh came in the context of statements made by the members that the Centre should have refrained from going ahead with the UTI Ordinance till the JPC finalised its report.

In his reply, the minister affirmed that the finance ministry would await the contents of the JPC report.

The minister told the members the government was looking at a timeframe of five years for the divestment of UTI-II. The members of the committee had said any decision on the future of UTI-II recommended by the body would be useless if the revamp of the mutual fund was completed by the finance ministry in the interregnum.

Allaying these apprehensions, Singh said there would be enough time to incorporate the issues after the JPC report was tabled in Parliament.

As per the UTI Ordinance, UTI-II will run all the net asset value-based schemes of the present UTI.

Accordingly, the Centre will run UTI-I, which has a corpus of above Rs 24,000 crore (Rs 240 billion) through an administrator.

UTI-II will be sponsored by Life Insurance Corporation, the State Bank of India, Bank of Baroda and Punjab National Bank.

Since the four are public sector entities, the influence of the Centre on UTI-II will not be eliminated. This implies that the eventual privatisation of the mutual fund is not envisaged soon.

The minister told the JPC his ministry had to undertake the split in UTI because of its difficult financial position.

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