The Hindu Business Line : Bihar milkmen tie up with UTI MF

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Bihar milkmen tie up with UTI MF

Nilanjan Dey

To invest in retirement benefit pension scheme

Patna , Sept. 17

You probably know them as the friendly neighbourhood doodhwalahs, not as folks who would care much about investing regularly for their sunset years. But milkmen in Bihar are out to change your perception, perhaps for ever and with good reason. A sizeable number of them, guided by the Bihar State Co-operative Milk Producers' Federation, or COMPFED in short, have tied up with UTI MF for investing in a fund that aims at the retirement market.

Initiative

The latest micro-pension initiative taken by the fund house, consecrated by the State Government, will seek to tap members of milk producers' unions, whose contributions will be invested in UTI Retirement Benefit Pension Fund (RBFP).

Considering the fact that there are more than a couple of lakh members, the arrangement may well assume far bigger proportions, notes Mr Amir Subhani, CMD of COMPFED, adding that each contributor will be required to put in at least the minimum amount at regular intervals till he or she is 55. The `pension' will flow in after the individual concerned turns 58. For starters, roughly 40,000 members will join.

Retirement Savings

The process, it is pointed out, will spawn a very important habit - regular savings - considered significant in the backdrop of inadequate retirement planning, especially so among low-income groups in the country.

As statistics cited by Mr U.K. Sinha, CMD of UTI MF, suggest, the nation's of 60-years-plus populace is growing rapidly. Already, there are 8 crore elderly Indians, a number that is likely to double by 2030. Added to this is increasing longevity - a fact that retirees have to live with, however, expensive that may be.

UTI RBPF, it may be mentioned, allows tax-saving under Section 80 of the I-T Act. Up to 40 per cent of its assets may be invested in equity. As on July 31, it has provided roughly 12 per cent since inception (in December, 1994). It managed Rs 430 crore or so as on that date. Bihar seeks support

The Bihar Government, in its bid to step up collection from milk producers in the organised sector, is looking at firm support from the National Dairy Development Board (NDDB) in this regard.

The State, which currently collects about 6 lakh litres of milk, has already seen the start of a dairy management programme with the NDDB acting as advisor. Incidentally, A single district in Maharashtra, Baramati, collects as much as 5 lakh litres.

The State's recent proposals have included insurance of animal resources as well. An insurance plan, in which the Government bears 50 per cent of the cost and a cattle owner pays the remaining 50 per cent, has been worked out. This has been set off in a few districts already.

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