Ignorance is no bliss

Mr Sinha’s answers always raise new questions

Why is it that Union finance minister Yashwant Sinha’s answers on any issue pertaining to l’affaire Unit Trust of India (UTI) always end up raising new questions? At each stage in the evolving drama, Mr Sinha’s replies have only raised more questions. His apparent bravado and transparent mischievousness in Parliament on Thursday have not helped address the doubts in people’s minds nor set at rest speculation that there is more to it than meets the eye. Mr Sinha cannot have it both ways. Either he must say that UTI’s current travails are the result of years of political interference and mismanagement, which is what he tried to suggest in Parliament on Thursday, or he must concede there was some problem with the way in which UTI’s ex-chairman, Mr P S Subramanyam, ran the show. If the problem dates all the way back to 1993, then why hang Mr Subramanyam and why were these issues not raised earlier? If the real problem has to do with more recent managerial decisions, then what was the finance ministry doing? Mr Sinha has to sound more convincing in claiming ignorance about Mr Subramanyam’s alleged misdeeds.

Mr Sinha does not sound convincing when he says his ministry was blissfully ignorant of the murky goings on in UTI. If his ministry officials knew of what was going on, but had not informed him then: what has he done about it? Even on the limited issue of the delay in the union finance secretary’s attempt to draw the finance minister’s attention to the letter from UTI on suspension of US-64, we have so far not had any explanation as to what exactly happened that crucial weekend and what subsequent action has been taken to make amends for lapses committed by ministry officials. Mr Sinha would be on firmer ground if he had pointed to the inherent weaknesses of the US-64 scheme and had conceded that it was the flawed nature of this scheme which lies at the root of all of UTI’s problems. But again, having bailed UTI out of troubled waters once on US-64, what had the finance ministry done to keep a tab on US-64? This question also remains unanswered. Going beyond UTI, there is now growing evidence of rot having set into the entire financial sector, with IFCI and Industrial Development Bank of India (IDBI) also facing problems of solvency.