Financial Daily from THE HINDU group of publications
Monday, Sep 02, 2002
Financial Daily from THE HINDU group of publications Monday, Sep 02, 2002 |
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Markets
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Mutual Funds Columns - Say Cheek UTI, giri, gayi? D. Murali
YASHWANT Sinha, when he read out his last Budget speech, wrapped up saying that he estimated that the direct tax revenue in 2002-2003 would be Rs 91,585 crore and that the total tax revenue receipts for the Centre would be Rs 1,72,965 crore. Now, his successor Jaswant Singh is giving away almost a sixth of the direct tax collections to rescue UTI. The Rs 14,561-crore package which is aimed at making UTI rise from the deathbed would work out to about Rs 1,500 per head, taking the population as approximately 100 crore, and including every child and oldie in the denominator. With that depressing thought, one can seek answers for more pressing questions. They call this bailout, but who is in jail? Dictionary meaning of `bailout' is to have accused person released on bond, or to secure somebody's release from legal custody by paying bail, or posting bond. Now, this is a case of failed company getting a big helping from the Government. So, don't imagine that Jaswant is giving all that money to get some crooks out of prison. Are we all affected if the FM didn't give the money to UTI? Not all, because they say 2 crore investors have put money in UTI's schemes and they would be hit if the Goliath fell down. That means the balance 98 crore are not affected. The moot question is whether the giveaway should be taken out of the coffers into which all of us are putting in money in the form of taxes. I am not too happy with the new names. Not too imaginative, perhaps, to call one company UTI-I and the other UTI-II. Probably, they didn't have the time and money to engage a consultant to think of a name. If the FM would consider, we can give a few suggestions for names: such as, Chotta-Bada (because I is smaller than II), We-They (because management will be by the Government chaps in the first case, and by professionals in the other), Day'ga-Dekey'ga (because assured returns are guaranteed by the FM, whereas the other one would be based on NAV), TaTa-BuyBuy (because UTI-I would cease to exist once all investors jump out of the sinking ship, but UTI-II may live happily ever after), and so on. Why do they split the big body? This is like amputation. The sick portion is retained by the Government because it has all the unpleasant commitments, and the comparatively healthy portion is going to be given to professional managers. According to the Finance Secretary, the split is to ensure that another bailout would not be necessary, because UTI II would work like any other healthy mutual fund. I used to think there was gold in the pot that UTI's logo sported. More likely, there was water in it. Only, it got evaporated.
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