The Divestment Commission has recommended privatisation of four public sector undertakings including National Buildings Construction Corporation and Cotton Corporation.

In a report submitted to the government recently, the Commission suggested sale of 74 per cent stake of its 100 per cent shareholding in NBCC to a strategic partner while retaining 26 per cent for three years.

The Commission has also recommended divestment in Indian Medicines Pharmaceuticals Corporation and Jute Corporation of India.

It has also said that an appropriate financial and organisational restructuring package should be formulated for the company after consultation with the bidders.

The Commission noted that there was no rationale for the government to continue in the company as there were no social benefits accruing from future association due to existence of employment opportunities.

It further said that there were no strategic reasons for continuation nor was the government's presence necessary owing to monopoly considerations on account of presence of adequate number of players in the market.

NBCC has a equity base of Rs 120 crore (Rs 1.2 billion) and employs around 3150 employees.

In the case of Cotton Corporation where the government holds 100 per cent stake, it said that divestment would be conditioned by whether the government decides to retain minimum support price for cotton.

It said that in case the government chose to retain MSP then strategic sale of 51 per cent stake would be appropriate while holding onto the remaining 49 per cent for a period of three years.

It went on to add that IMPCL had outlived its utility in the present form with small size of operations failing to justify government involvement and furthermore involvement is inconsistent in the absence of strategic objectives.

The commission also suggested two options for Jute Corporation of India involving retaining government ownership for five years in case MSP operations continued and thereafter offloading 51 per cent to strategic partner along with organisational restructuring.