The Sale of CEL is not justifiable




Smt Nirmala Sitharaman

Union Finance Minister

Dear Smt Sitharaman,

I understand from news reports ( that the PSU, Central Electronics Ltd (CEL) is about to be sold to a private financial intermediary company, Nandal Finance & Leasing Pvt ltd for an amount of Rs 210 Crores. By any stretch of logic, the manner in which CEL is being sold does not seem to be justifiable.

I have enclosed here for your ready reference a reply given in Lok Sabha (Starred Question No 497) on 26-7-2019 by the Minister for Science & Technology in response to a question asked by Shri Sambhajirao Mane Dhairyasheel on CEL. Among others, the following portion of the reply is of particular importance.

CEL has developed several products for the first time in the country through its own R&D efforts as well as in collaboration with different CSIR and DRDO labs and other institutions. These include, the first solar cell and solar modules in 1977 & 1978 respectively, first solar power plant in 1992, Phase Control Module (PCM), LRDE (Electronics Radar & Development Establishment) for use in Rajendra Radar, Cadmium Zinc Telluride (CZT) for Defence applications and Axle counter for the use of Railway signalling systems. Recently, CEL has taken a number of technologies from

different National Laboratories, institutions such as: Fused Silica Radome for Missile from DMRL/DRDO; Laser Fencing Systems from LASTEC/DRDO; and CVS Sensor from IIT Delhi and has developed products that are ready for commercialization“.

In addition, CEL’s Annual Report shows that “a number of initiatives have been taken up for development of new products in collaboration with DRDO & DSIR Laboratories and the company has already received ToT for one such product i.e. Ceramic Radome for Seeker Missiles and a number of other initiatives are moving ahead rapidly. Development projects are also underway in railway signaling related areas“.

In other words, CEL is involved in work of strategic importance.

No wonder, the Parliamentary Committee on Science & Technology, in their 328th report (copy enclosed), placed before the two Houses of the Parliament on 6-3-2020, expressed their appreciation of CEL’s efforts towards indigenisation of several electronic items of importance.

CEL is no longer a loss-making unit, as it has turned the corner and started earning profits. Therefore, it cannot be considered as a PSU that drains the public exchequer.

In the “Atma Nirbhar” campaign of the Prime Minister, one would have thought that the country would choose PSUs such as CEL and tap their capabilities built over five decades to have a larger role in work relating to solar PV, electronics and defence-related products, rather than selling them away to private companies which are far removed from such activity, spelling a doom for such efforts.

Even on the basis of an assessment of the assets available with CEL, the finalised disinvestment proceeds of Rs 210 Crores bear no relationship whatsoever with their potential value. For example, CEL has a 50-acre plot in Sahibabad industrial area near Delhi. On a highly conservative basis, the market value of this alone works out to Rs 500 Crores, not counting the value of CEL’s valuable urban property in Bengaluru, its plant and machinery and the value of the excellent human resources it possesses. Is it really worth the effort to sell all these valuable assets for a song?

I am somewhat apprehensive of private companies slipping into the hands of overseas companies of dubious background, in view of the FDI norms that the government has significantly relaxed over the years. If a PSU like CEL with its skills and knowledge in strategic areas of importance goes that way, it will certainly hurt the national interest.

I am not sure whether the concerned Department has apprised the Union Cabinet adequately of the implications of privatising CEL, so as to enable the Cabinet to take a considered view, keeping in view the intent of the PM’s Atma Nirbhar effort and the overall national interests.

I would earnestly request you to get these concerns of mine examined before rushing into selling CEL.


Yours sincerely,

E A S Sarma

Former Secretary to Govt of India



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