ONCE upon a time there existed a strange corporate behemoth called the Unit Trust of India. Nobody quite knew what it was. Like most big financial institutions, it was owned and controlled by the government. It received tons and tons of money from investors—you and I as well as from companies, banks, other financial institutions and pension funds—which it then reinvested in the Indian capital market.
Of UTI's many investment schemes, the most famous was the US-64, which began in 1964, and went on and on. By 1998, US-64 had attracted over 25 million investors whose money created a capital base in excess of Rs 14,000 crore, and made it the biggest fund in corporate India. Those who bought into US-64 were given chits of printed paper, called units. Every year, the unit-holders earned a dividend. At last count, the dividend was 20 per cent per unit whose face value is Rs 10—not as brilliant as 25-26 per cent in 1992-93, but a yield of 14 per cent nevertheless.
UTI seemed to have the appearance of a mutual fund company. But it...
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