The decision was taken today at a meeting of the Cabinet Committee of Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi here.
REIL is a joint venture between Rajasthan State Industrial Development & Investment Corporation (RIICO) and Instrumentation Ltd, Kota, with 49 per cent and 51 per cent ownership, respectively.
The Kota unit has been in the red for many years.
Last year, employees of the Palakkad unit of Instrumentation Ltd, which too has been making profits, had met the Prime Minister demanding the unit either be given an independent status or merged with a profit-making PSU.