ROLE OF UTI

Mobilization of Savings: Unit Trust of India right from its inception has been playing a useful role in mobilization of savings of the people. Pattern of Investment: The most important aspect of the utilization of funds is the pattern of investment of the Trusts funds. The information available on the direction of the investible funds of the Trust in different investment outlets discloses that the Unit Trust has tried its best to build a balanced flexible investment portfolio composed of corporate securities, government securities and other investments, representing fixed deposits with companies, advance deposits for shares and debentures, bridging finance , application money and money at call and short notice in order to ensure a reasonable return, consistent with the safety of capital and capital appreciation. Assistance to corporate sector undertaking: By serving as an effect conduit between saving and investment UTI has achieved spectacular success in rendering financial support to programmes of rapid industrialization in the country. Because of the sizeable resources garnered by the Trust, it has been possible for it to pump substantial amount of assistance into the corporate sector undertakings. Forms of assistance: The Trust has granted financial assistance to the corporate sector by investment in privately placed debentures and loans, underwriting and direct subscription and by way of special deposits. It is to be noted that about 50 percent of assistance of the Trust was in the form of underwriting and direct subscription. About one third of the Trusts assistance was by way of privately placed debentures and loans. Purpose wise distribution of assistance : Until recently, major portion of assistance was given to existing projects for their expansion and diversification programmes. However, in recent years UTI provided lions share of its funds for other purposes (i.e. working capital). Sectoral distribution of UTIs assistance : UTI has invested bulk portion of its funds in private sector undertakings. Private sector enterprises received about 80 percent of the total assistance of the trust. UTIs assistance to backward areas : In consonance with the government policy of fostering industrial growth in relatively backward areas, UTI has been providing sizeable amount of assistance to

enterprises located in these areas. UTI has provided assistance to backward areas through subscription to privately placed debentures. State wise distribution of assistance : The Unit Trust of India has provided assistance to industrial enterprise situated in different parts of the country in order to accomplish a geographical diffusion in its investment portfolio. However, a few industrially advanced states have claimed a large chunk of the Trusts assistance, Five advanced states Gujarat, Karnataka, Maharashtra, Tamil Nadu and West Bengal received more than 70 percent of the total assistance, the remaining 30 percent was distributed among as many as 16 states and Union Territories. Bigger states like Bihar, Uttar Pradesh and Madhya Pradesh, had to be content with smaller assistance.