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Sinha rules out UTI privatisation

The government on Friday ruled out privatisation of Unit Trust of India and declared that it would fully support the country's largest mutual fund, which had been in the eye of a financial storm.

"This (privatisation) is not on our agenda," Finance Minister Yashwant Sinha told reporters, adding there was also no proposal to cut interest rates on small savings like post office schemes in the face of movement towards softer interest rate regime.

When asked about the studies being conducted by the finance ministry on exploring UTI's privatisation, Sinha said, "discussions don't mean a final decision."

Contrary to fears that UTI might face a problem of discharging its liabilities by January, Sinha said that hardly Rs 2 billion were redeemed following demands since August after crisis surfaced in US-64, the flagship scheme of the mutual fund.

"Pressure which we expected has not materialised. UTI is now in very competent hands," he said referring to change of guard after the controversial exit of P S Subramanyam as chief of the trust.

Sinha said the government would fully stand behind UTI in case there was any pressure or need.

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