Thursday, July 29, 2021

OFB corporatisation gets Cabinet approval

This is a historic choice and there must be no concern on staff’ half: Rajnath

The Union Cabinet on Wednesday authorised a long-awaited plan to corporatise the Ordnance Factory Board (OFB), which has 41 factories unfold throughout the nation, into seven totally government-owned company entities on the traces of the Defence Public Sector Undertakings (DPSUs).

Once carried out, the OFB, the institution of which was accepted by the British in 1775, will stop to exist.


“This is a historic decision and there should be no concern on the part of the employees. There will be no change in service conditions of the employees which is also mentioned in the Cabinet note,” Defence Minister Rajnath Singh mentioned, assuring the 70,000 staff who had expressed concern over the proposed transfer.

‘Major decision’

It is a serious choice by way of nationwide safety and likewise make the nation self-sufficient in defence manufacturing as repeatedly emphasised by Prime Minister Narendra Modi, Mr. Singh said.

This transfer would enable these corporations autonomy in addition to assist enhance accountability and effectivity, a defence official mentioned. “This restructuring is aimed at transforming the ordnance factories into productive and profitable assets, deepening specialisation in the product range, enhancing competitiveness, improving quality and achieving cost efficiency,” the official mentioned.

Currently, the Kolkata headquartered OFB capabilities as a division underneath the Department of Defence Production. There have been a number of suggestions by high-level committees prior to now for corporatising it to enhance effectivity and accountability.


All staff of the OFB (Group A, B and C) belonging to the manufacturing items could be transferred to the company entities on deemed deputation initially for a interval of two years with out altering their service situations as Central authorities staff, the official defined. The pension liabilities of the retirees and present staff would proceed to be borne by the federal government.


The present could be subsumed into seven company entities based mostly on the kind of manufacturing. The ammunition and explosives group could be primarily engaged in producing ammunition of varied calibre and explosives, with large potential to develop exponentially, not solely by the use of ‘Make in India’ but in addition by ‘Making for the World’, the official mentioned.

Similarly, the autos group would primarily interact in producing defence mobility and fight autos resembling tanks, trawls, infantry and mine protected autos.

“The weapons and equipment group would be mainly engaged in production of small arms, medium and large calibre guns and other weapon systems and is expected to increase its share in the domestic market through meeting the demand as well as product diversification,” the official mentioned. The troop consolation objects group, the ancillary group, the opto-electronics group and the parachute group constituted the whole construction, the official said.

The above construction would additionally assist in overcoming varied shortcomings within the present system of the OFB by eliminating inefficient provide chains and supply these corporations incentive to change into aggressive and exploring new alternatives out there, together with exports, the official added.

An Empowered Group of Ministers (EGoM), arrange final September underneath the chairmanship of the Defence Minister, would resolve upon the issues associated to implementation and evaluation any points arising sometimes.

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