The Defence Ministry has ordered the dissolution of the four-decade-old Ordnance Factory Board (OFB) and the consolidation of 41 factories into seven new state-owned businesses to produce defence gear ranging from munitions to heavy weapons and vehicles.
The move, which was first announced in June as part of the “Atmanirbhar Bharat” (self-reliant India) package, aims to improve efficiency, autonomy, and accountability, as well as establish a corporate structure for the network of ordnance factories, amid calls for reforms in the state-run defence industry.
OFB will be dissolved on October 1 and the assets, personnel, and operations of the 41 factories will be transferred to the seven defence public sector entities, according to an official order issued by the department of defence production under the defence ministry on September 24. (DPSUs).
Munitions India Limited, located in Pune, would produce ammunition and explosives, while Armoured Vehicles Nigam Limited, based in Avadi, will combine five facilities that make heavy vehicles. The Kanpur-based Advanced Weapons and Equipment India Limited, which would produce weapons and equipment, will bring eight companies that create weapons ranging from small arms to rifles and field guns under its umbrella. Troop Comforts Limited will supervise the production of clothes and other goods, and it will have four facilities. Yantra India Limited, located in Nagpur, would supervise the operation of eight facilities producing military-grade components and auxiliary goods, while India Optel Limited, based in Dehradun, will bring together three companies producing optoelectronic items. Gliders India Limited, which will manufacture parachutes, will take over the Ordnance Parachute Factory in Kanpur. According to the order, ten non-production units, including the National Academy of Defense Production and several institutes of learning, will be merged with the seven new companies, while 11 additional non-production units, including regional marketing centres, will be handed over to the companies and their employees will be transferred to different factories.
The directorate of ordnance will get 3,152.11 acres of excess land from 16 ordnance plants (coordination and services).
According to the directive, the seven new businesses must “create norms and regulations relating to service conditions of the absorbed workers” and “request an option for permanent absorption from personnel on presumed deputation to that particular DPSU, within a term of two years.”
Singh called the decision to corporatize the OFB a “historic one” after the Union cabinet approved the move in June. “From the standpoint of national security, it is also a major decision,” Singh had said. Three labour organisations have spoken out against the plan, claiming that the units employ 80,000 people in total. In November 2020, the unions also proposed reorganising the plants and increasing their efficiency in order to meet output goals.
Although the OFB, headquartered in Kolkata, was founded in April 1979, several ordnance industries have a long history. The 18th century saw the establishment of some of West Bengal’s earliest industries. In recent decades, the armed services and specialists have increased their requests for unit changes to include new technologies and manufacturing techniques and guarantee the development of advanced weapons. The government’s decision is the first significant revamp of the factories in decades, and the establishment of a corporate structure will allow the businesses to generate money by going public if the government so desires.
To promote defence indigenization, India has set aside Rs. 70,221 crore, or 63 percent of the military’s capital budget, for the purchase of domestically manufactured weapons and equipment. The defence ministry has approved domestic military acquisitions of Rs 13,700 crore, including plans to acquire 118 Arjun Mk-1A tanks and modernise armoured combat vehicles. The new tanks alone would cost Rs 8,380 crore, with state-run companies completing the order.
Source: Hindustan Times