Ordnance Factory Corporatization: The Centre issued orders for the dissolution of the Ordnance Factory Board (OFB) from October 1, 2021. The operations, staff, and assets of its 41 ordinance factories will be transferred to seven Defence Public Sector Units (DPSUs). The 220-year old OFB was established in 1979 and its roots trace back to the establishment of the Board of Ordinance in 1775 in Fort William in Kolkata which was back then the base of Bengal operations of the East India Company.
What is OFB?
The Ordnance Factory Board (OFB) comprising the Indian Ordnance Factories, is an organization under the Department of Defence Production, Ministry of Defence. Headquartered in Kolkata, it is a conglomerate of 41 factories, 9 training institutes, 4 regional controllers of safety, and 3 regional marketing centres.
The OFB manufactures supplies, ammunition, and weapons that are used by the armed forces, police forces, and paramilitary forces. The products include military-grade and civilian arms and ammunition, chemicals for missile systems, explosives, propellants, armoured vehicles, parachutes, optical and electronic devices, troop clothing, support equipment, and general store items for the armed forces.
Ordnance Factory Corporatization – Why?
In May 2020, the Centre’s decision to dissolve OFB was conveyed by Finance Minister Nirmala Sitharaman as part of ‘Aatmanirbhar Bharat’. The Centre decided on the corporatization of OFB and dismantle the conglomerate into smaller companies for better autonomy, efficiency, and accountability in ordnance supplies.
Dissolution of OFB into 7 Defence Public Sector Units
In the process of the corporatization of the Ordnance Factory Board (OFB), 41 factories, 9 training institutes, 4 regional controllers of safety, and 3 regional marketing centres of OFB will be restructured into 7 Defence Public Sector Units (DPSUs). Approximately 70,000 employees, assets, and operations of the conglomerate will be transferred to these 7 DPSUs. These 7 DPSUs will be 100 per cent state-owned. Currently, the OFB has a turnover of approximately Rs 19,000 crores.
The name of 7 new DPSUs are:
(i) Gliders India Limited
(ii) India Optel Limited
(iii) Yantra India Limited
(iv) Troop Comforts Limited
(v) Advanced Weapons and Equipment India Limited
(vi) Armoured Vehicles Nigam Limited
(vii) Munition India Limited
Dissolution of OFB - Background |
| Due to the monopoly of OFB, there has been an increase in costs of production, lack of innovation, low productivity, and lack of flexibility at managerial levels. On the recommendations of three expert committees on defence reforms set up namely the TKS Nair Committee in 2000, the Vijay Kelkar Committee in 2005, and Vice Admiral Raman Puri Committee in 2015, the OFB was decided to be restructured into corporate entities The decision to dissolve OFB was ratified during a meeting of the Cabinet Committee on Security in July 2020. Under the leadership of Defence Minister Rajnath Singh, an Empowered Group of Ministers (EGoM) was set up on September 10, 2020, to oversee the whole process of the corporatization of OFB while safeguarding the wages and retirement benefits of employees and their redeployment plan. The government has been facing opposition from the OFB staff and three federations of employees that announced an indefinite strike in 2020 if the Centre does not reverse the decision. The three federations of employees comprising mostly 75,000 workers across 41 factories of OFB are the All India Defence Employees’ Federation (AIDEF), the Indian National Defence Workers’ Federation (INDWF), and the Bharatiya Pratiraksha Mazdoor Sangh (BPMS). Hence, the Central government in July 2021, issued an Essential Defence Services Ordinance (EDSO) that prohibits workers of OFB from going on strike. |
Assurances to OFB workers, employees
The Central government has announced that all employees across the Group A, B, & C of OFB facilities will be transferred to the new PSU without any deputation allowance initially for two years from the date of appointment. On the other hand, the employees of OFB offices in Kolkata, New Delhi, also including schools, hospitals run by OFB will be transferred to the Directorate of Ordnance Factories (to be set up) under the Department of Defence Production for two years.
The pay scales, allowances, medical facilities, career progression, leaves, and other services will be governed by the regulation and orders as applicable to the Central government servants. The pension of existing employees and retirees will be taken care of by the government.
-1756215887593.jpg)
Comments
All Comments (0)
Join the conversation