The proposed voluntary retirement scheme of the Unit Trust of India has made no provisions for ensuring that employees indicted by the Joint Parliamentary Committee in the 2001 stocks scam remain ineligible for the scheme.

The VRS for UTI, which is much more liberal than the one framed for bank employees, is expected to reduce the total number of employees in the organisation to less than 40 per cent of the current strength of 2,400.

Most of these employees are in UTI-I. It hopes to recruit professionals from outside to man specialised functions like fund management.

However, the central government will have to fork out Rs 180 crore (Rs 1.80 billion) for the VRS as the specified undertaking has expressed its inability to provide the amount from its own resources.

The cost is in addition to the sum the finance ministry has shelled out to meet the redemption pressure on different assured returns schemes of UTI as well as US-64.

The Budget for 2003-04 has provided a sum of Rs 6,500 crore (Rs 65 billion) to meet the demands on the various redemption schemes.

To ensure that the VRS is successful, there will be no restrictions on possible deputation for those who opt for the golden handshake.

Officials said the VRS was better than those offered by public sector banks. It was likely to be one month of pay for every year of completed service.

But the mutual fund has not formulated any clause for ensuring that employees tainted by the US-64 scam are retained by the company.

While the JPC has not named anybody, it has said the government should punish those found guilty. The finance ministry has accordingly informed Parliament that it is taking steps to identify corrupt officials.

The UTI golden handshake will effectively restructure the organisation.

In the VRS model for other banks, the finance ministry had made it clear that they will have to finance the cost of the scheme and it was also restricted to shedding excess flab in banks by reducing not more than 20 per cent of the employees.