The Rise and Fall of US-64 Case

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Introduction

The Unit Trust of India (UTI) came into existence on the 1st of February 1964, through the UTI Act, 1963. Unit Scheme 64 (US-64) was launched as per the provisions of the UTI Act. The scheme was a great success and was considered an essential investment by most middle class Indians. At its peak, the scheme had around 20 million investors. But in the late 1990s, UTI went from crisis to crisis. Government efforts to restore the fund's past glory proved abortive. For the first time in 2001-02, UTI did not offer any dividend to its unit holders. Following a top management reshuffle, the process of winding up US-64 began.

Early History
The origin of Unit Trust of India (UTI) went back to the time of union minister T.T. Krishnammachari, who had seen a news item about the formation of a government-sponsored unit trust in Pakistan. In September 1963, after Krishnammachari took over as the Finance Minister, the government machinery began to move speedily on the Draft Bill to set up UTI¹. The Lok Sabha passed the Bill, on 5th December 1963 and the Rajya Sabha, a week later. It received President S.Radhakrishnan's consent on 30th December 1963 and became UTI Act, 1963².

Excerpts >>

1] See Annexure 1 for the definition of a Trust.

2] Section 3 of the Unit Trust of India Act, 1963 had provided for the establishment of UTI by the Central government through a notification in the Official Gazzette. Accordingly, the government published GSR 173 dated 31st January 1964 in the Gazette of India and UTI was born on 1st February 1964.

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