The question of establishing an institution in the public sector, fur carrying on the business which i, transacted by unit trusts or mutual funds in other countries has been under consideration for some time. It is now proposed to establish such an institution, to be known as Unit Trust of India, with an initial capital of five crores of rupees. The Unit Trust of India will encourage saving by providing for various classes of investoes the facility of investing their money in units of the Trust. The Trust will invest the initial capital and the capital obtained by the sale of units in shares and other securities and will distribute every year not less than ninety per cent. of the net income accruing to the unit-holders. It is expected that the risk of losses or of depreciation on account of the investments will be reduced or eliminated as a result of the proposed arrangement. The Trust will also he in a position to contribute, through its operations, to the growth and diversification of country's economy.The various provisions of the Bill are explained in detail in the notes on clauses.-Gazette of India, 26-11-1963. PI. II, Section 2, Ext., p. 802.Amending Act 10 of 1965 - The Unit Trust of India Act. 1963 provide', at present for the sale of units by the Trust under a scheme, which was brought into force on July 1, 1964. Although the response from the public has been encouraging, it is considered desirable that the Trust should be enabled at this stage to offer in addition, facilities for the acquisition of units by various classes of investors under other schemes catering to their special preferences or requirements. It is also proposed that the Unit Trust should be in a position to formulate plans for the accumulation of saving by intending investors. for subsequent investment in units.
