Ordnance Factory Board gets major overhaul; 246-year-old OFB scrapped, new entities born; Check details

By: |
June 17, 2021 8:38 AM

Defence Minister Rajnath Singh has assured the employees that their service conditions will remain the same.

rajnath singhWith the government focusing on export of defence items/platforms made in India, the new structure will help in overcoming several shortcomings in the existing system.

Late Wednesday evening (June 16, 2021) the Union Cabinet took a decision to scrap the Ordnance Factory Board (OFB) which was first set up by the British in 1775.

Defence Minister Rajnath Singh has assured the employees that their service conditions will remain the same.

Now, all the employees of OFB (Group A, B & C) who belong to the various production units are going to be transferred to the corporate entities on deemed deputation. The deputation will initially be for two years and there will be no changes in their service conditions as central government employees

According to the minister who will be heading the Empowered Group of Ministers, such a move will help in improving the efficiency as well as accountability. And will allow these companies autonomy.

There are around 70,000 employees in the OFB, which was under the Ministry of Defence.

What does the decision say?

According to officials, the OFB will be divided into seven different companies, in a specific manufacturing role.

All the 41 factories under the OFB will now be subsumed under one or the other of the seven new companies, all 100 per cent government owned public sector undertakings (PSU).

Have the seven companies been named?

No, not yet. PSU entities will cover a separate sector.

There will be the ‘Ammunition and Explosives Group’. The function of this entity will be to produce ammunition of various caliber and explosives. These will be both for the Indian market as well for exports.

The `Vehicles Group’, according to officials, will be engaged in the manufacturing of the defence and combat vehicles which include Mine Protected Vehicles, Trawls, Tanks and BMPs.

‘Weapons & Equipment Group’ for the production of small arms, medium and large caliber guns and other weapon systems. This will help in meeting the domestic demand as well as product diversification.

And the rest of the four companies are expected to be: Ancillary Group; Opto-Electronics Group; Troop Comfort Items Group; and Parachute Group.

More about these PSUs

The 41 OFB Factories will be subsumed by the seven PSU entities based on the type of manufacturing done by them.

These factories have some of the finest manufacturing facilities which produce not only artillery guns, tanks, heavy vehicles, but also specialize in the manufacturing of small arms and ammunitions, and special wires etc. which are needed in the various platforms.

Why is the restructuring important?

This decision of the restructuring by the Cabinet is aimed at turning the Ordnance Factories into assets which are profitable; which will help in improving the quality of the platforms and products and are cost effective. The restructuring is expected to help in enhancing competitiveness and further deepening specialization in the product range.

With the government focusing on export of defence items/platforms made in India, the new structure will help in overcoming several shortcomings in the existing system. And to also create opportunities in the global market.

The major customers of these OFs are the Indian Armed forces. Other customers include Paramilitary Forces; State Police Forces who procure their clothing, vehicles which are bulletproof and mine protected from the OFs. Also these forces procure their small arms and ammunition from OFB.

To help in decision making on the matters related to implementation of the government’s decisions taken on Wednesday as well as other incidental matters, Empowered Group of Ministers has been constituted under the minister of defence, Rajnath Singh has been set up. The Cabinet has decided to delegate the authority to this Empowered Group of Ministers which has the home minister, the finance minister, and the minister for labour and minister of state in the PMO.

History of OFB

The British authorities in 1775 accepted the establishment of the Board of Ordnance in Fort William, Kolkata.

Following which, in 1787 a gun powder factory was established at Ishapore West Bengal, and the production started from 1791. Around 18 more factories were set up by the British and the rest came up post-independence.

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