New Delhi: In a major restructuring move to transform India’s Ordnance Factories into productive and profitable assets, the Union Cabinet on Wednesday decided that the Ordnance Factory Board (OFB) will be replaced by seven government-owned professionally managed corporate companies.
An official source told ETV Bharat that besides enhancing autonomy, improving accountability and efficiency, the move is also aimed to deepen specialization in the product range, enhance competitiveness and improve quality and cost-efficiency.
Ordnance factories (OFs) are the oldest and largest organization in India’s defence industry that employ nearly a lakh workers.
While taking this decision, the government has ensured that the service conditions of the existing central government employees of OFB are protected.
The source said that in order to safeguard the interests of the OFB employees, “all employees of OFB (Group A, B & C) belonging to the production units would be transferred to the corporate entities on deemed deputation initially for a period of two years without altering their service conditions as central government employees.” The government will also continue to bear the pension liabilities of the retirees and existing employees.
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The 41 OFs under the administrative control of the Ordnance Factory Board (OFB) operate under the defence ministry’s department of defence production.
These seven newly-created companies will take under their fold the functions of the existing 41 factories under the OFB.
The seven companies will comprise the ammunition and explosives group, the vehicles group, weapons and equipment group, troop comfort Items group, ancillary group, opto-electronics group and parachute group.
The ammunition and explosives group would produce ammunition of various caliber and explosives with an emphasis on not only by way of ‘Make in India’ but also by ‘Making for the World’, the vehicles group would manufacture tanks, trawls, BMP and mine-protected vehicles while the weapons and equipment group would produce small arms, medium and large caliber guns and other weapon systems.
A defence minister-led Empowered Group of Ministers (EGoM) has also been constituted to decide upon the matters related to implementation of the Cabinet decision on OFB and other incidental matters.
On February 16, 2017, the Prime Minister’s Office (PMO) had asked the OFBs to furnish a report on their achievement from 2013 onwards.
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The letter had sought a report on all the items and products like ammunition, weapons, clothing and other military equipment that OFs had produced in the last three years from 2014 onwards along with details of the costs involved besides photographic evidence.
While the Army is the main client of OFs accounting for 80 per cent of the production, the Air Force and Navy together account for less than 4 per cent of the factory issues with paramilitary forces and the state police forces accounting largely for the rest.
