Central Electronics Limited is a government-owned engineering company based in Ghaziabad in the state of UP. They specialize in the manufacturing of defense equipment.
CEL is one of the top manufacturers of single crystalline silicon solar cells and was crowned as the first to develop solar cells (1977) and panels (1978) in India.
They have also introduced an axle counter system used for block proving and tracking occupancy detection by the Indian Railways.
Privatization in the Public sector
Prime Minister Narendra Modi earlier this year announced the privatization of public sector units in a webinar on Privatisation and Asset Monetisation.
He stated that the government has “no business to be in business.” He further adds that the government would be involved in four strategic sectors, and the remaining public sector units would be privatized.
A new ‘Public sector enterprises policy’ was released in May 2021 by the FM Nirmala Sitharaman to this effect.
Public sector enterprises policy categorizes PSUs into strategic and non-strategic sectors. The departments that will be classified under strategic sectors are:
● atomic energy, space, and defense.
● transport and telecommunications.
● power, petroleum, coal, and other minerals.
● banking, insurance, and financial service.
Enterprises in the above departments will be privatized, closed, merged, or amalgamated, depending on feasibility.
State-run units in this sector will be reduced to a minimum except for four strategic sectors: Railways, Posts, the Airport Authority of India, and significant port trusts.
Enterprises that are not classified under the above departments will be classified as non-strategic.In this sector, too, enterprises will be either closed or privatized.
Reasons for privatisation
PM Modi states that the Public sector units are running in losses, and keeping them going will only burden the economy.
Privatisation will bring in the necessary investment, improve R&D, and eventually increase the economy’s growth rate.
CEL, BPCL, Shipping Corp of India, Pawan Hans, BEML, and Neelachal Ispat Nigam Ltd are a few other PSUs expected to be privatized by March 2022.
Privatization process resumed
The sale of Air India to Tata group restarted the privatization process after 19 years. CEL is next in line.
The Preliminary Information Memorandum (PIM) of CEL released by DIPAM states that bidders interested in purchasing stakes of CEL must have a minimum net worth of Rs 50 crore.
The bidder will also be required to lock in their shares for three years, during which it cannot undertake the sale of its stake of CEL.
CEL employees fight against privatization
The employees of CEL disagree with the government’s decision, and they have protested against it for several days.
They believe that although CEL had been running in losses for a long time before, the fact that it has picked up over the last five years and has been earning profits without support from the government must be taken into consideration.
They also feel that sensitive information related to defense and national security could be compromised if CEL goes into the hands of private players.
CEL financial bid received
According to the tweet of the secretary of the Department of Investment and Public Asset Management (DIPAM), Tuhin Kanta Pandey, the financial bids to transfer 100% ownership of Central Electronics Ltd (CEL) have been received by Transaction Adviser, and the process is now its final stages.
