The Ministry of Defence, India, has issued orders for dissolution of the Ordnance Factory Board. The order would be effective from October 1, 2021 as per the Union Government. Take a look at the requirements of the decision and the details behind this move of the Government below.
The Ministry of Defence took to social media platform Twitter to announce the same. Take a look at the tweet below.
10,000 से ऊपर SMEs का defence सेक्टर से जुड़ना, इन्हीं के परिणाम है। आज defence सेक्टर में research & development, start-up, innovation और employment बढ़ा है, यह सब इन्हीं के परिणाम हैं: रक्षा मंत्री
— रक्षा मंत्री कार्यालय/ RMO India (@DefenceMinIndia) September 28, 2021
सरकार द्वारा उठाए गए कदमों के परिणाम आज हमारे सामने हैं। जैसा कि मैंने शुरू में ही कहा, SIDM के साथ लगभग 500 members इन्हीं नीतियों के परिणाम हैं। पिछले 7 वर्षों में हमारे defence export का, 38 हजार करोड़ रुपए का आंकड़ा पार कर जाना इन्हीं नीतियों के परिणाम हैं: रक्षा मंत्री
— रक्षा मंत्री कार्यालय/ RMO India (@DefenceMinIndia) September 28, 2021
Dissolution of Ordnance Factory Board: Reasons given by Government
The reason for the Government's decision is considered as a part of Atma Nirbhar Bharat. Here the Government has announced that it would improve autonomy, accountability and efficiency in the ordnance supplies by corporatisation of the OFB.
The restructuring of the Ordnance Factory is aimed at transforming them into productive and profitable assets. It would in short deepen specialisation in the product range and enhance competitiveness as well. The entire process would be aimed at improving quality and cost-efficiency of the products.
What will happen to the employees of the OF:
The 41 factories, the assets and 70,000 employees that were on roll in the board would be split into 7 new Public Sector Undertakings, PSUs.
The seven PSUs in which the employees would be transferred are Munition India Limited, Armoured Vehicles Nigam Limited, Advanced Weapons and Equipment India Limited, Troop Comforts Limited, Yantra India Limited, India Optel Limited and Gliders India Limited.
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Official Statement of the Government:
“Accordingly, on and with effect from the appointed date, OFB, which has been set up vide Ministry of Defence letter no. 1(82)/78/D(Fy.I) dated 09.01.1979, shall cease to exist as a body. Further, the Board position of Member (Finance), OFB shall also cease to exist on and with effect from the appointed date,” the official memorandum issued by the Department of Defence Production (DDP) dated September 24 said.
Plan of Union Government: Process of Dissolution
It was the Union Government's long awaited plan to corporatism the Ordnance Factory Board that would become effective from October 1, 2021. The production units inclusive of the activities like arms, ammunition, weapons, vehicles, defence equipment and non defence equipment would be transferred. The Government would also transfer the management, control, operations and maintenance of various identified non production units of the OFB along with identified surplus land at its 16 production units to the Directorate of Ordnance (Coordination & Services) under the DDP.
The employees of Group A, B and C who belong to the production units and to the identified non production units would be transferred en masse to new DPSUs on terms of froeign service for a period of two years without any deputation.
“A committee would be constituted by the DDP for guiding the new DPSUs in this regard so that the absorption package given is attractive,” the Government order read.
Read| Explained: Why seven defence firms were carved out of the Ordnance Factory Board (OFB)?
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