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Shourie doubts UTI bailout efficacy

Union Divestment Minister Arun Shourie has expressed scepticism over the effectiveness of the bailout packages for Unit Trust of India and public sector company Steel Authority of India to restore their financial health.

Despite the financial assistance for a revamp, there would be no change in the style of functioning of these entities, Shourie said at an interactive meeting organised by the Indian Merchants' Chamber in Mumbai on Thursday.

"Senior officials in these concerned ministries will continue to control them," he opined.

Last week, the Centre had cleared a Rs 14,600 crore (Rs 146 billion) financial package for the country's largest fund to meet liability on US-64 and assured income schemes.

The government had come out with financial package for UTI in 1999 and had provided Rs 10,000 crore (Rs 100 billion) assistance to SAIL ,the state-owned steel company, he said. SAIL still continues to make losses.

On problems faced by UTI, he said financial institutions, including UTI, were forced to buy shares of public sector companies which investors were not interested to pick up.

UTI had thus incurred a loss of Rs 6,000 crore (Rs 60 billion) due to forced purchases and was one of the major causes for its current problems, he added.

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