41 Ordnance factories of the country will be modernized, Center approved to convert into 7 companies

Defense Minister called the decision historic, the service conditions of 70 thousand personnel will remain intact

41 Ordnance factories of the country will be modernized, Center approved to convert into 7 companies

Highlights

  • Defense Minister called the decision historic, the service conditions of 70 thousand personnel will remain intact
  • There will be no change in the service conditions of 70,000 employees working in these ordnance factories.
  • All employees will be sent on deputation for the first two years

Taking a major corrective step, the Central Government on Wednesday approved the reorganization of the nearly 200-year-old Ordnance Factory Board. Its purpose is to increase the capacity of ordnance factories as well as prepare them for competition. For this, 41 ordnance factories operating under the board, producing weapons, will be merged into seven companies. The Union Cabinet on Wednesday approved the reform process pending for nearly two decades.

Terming this decision as historic, Union Defense Minister Rajnath Singh said that there will be no change in the service conditions of 70,000 employees working in these ordnance factories. He said this decision has been taken to increase the defense production of the country. This is a big decision and it will meet the defense needs of the country. This will help us achieve our defense production targets. According to officials, all the seven companies will be like other defense ventures and will be run by professionally managed ones, aiming to increase the number of products and deliver cost-effective and quality products. This reform initiative is being taken under Prime Minister Narendra Modi's vision of a self-reliant India.

The seven new – yet to be named—PSU entities will cover a separate sector. One will be the ‘Ammunition and Explosives group’. This will engage in the production of ammunition of various calibre and explosives, not only for the Make in India initiative but also for exports.

The ‘Vehicles group’ would engage in the production of defense mobility and combat vehicles such as Tanks, Trawls, BMP and Mine Protected Vehicles.

‘Weapons & Equipment group’ would engage in the production of small arms, medium and large calibre guns and other weapon systems. This was expected to increase the share in the domestic market through meeting domestic demand as well as product diversification.

The other four companies would be ‘Troop Comfort Items group’, ‘Ancillary group’, ‘Opto-Electronics group’ and ‘Parachute group’.

Each of these PSU’s would subsume the 41 OFB factories based on type of manufacturing. OFB factories produce tanks, artillery guns, heavy vehicles, specialized wires, rifles, ammunition etc.

All employees will be sent on deputation for the first two years

According to an official, all the employees (A, B and C) attached to the ordnance factories will initially be sent on deputation to these new companies for two years. During this, there will be no change in their service conditions and they will remain employees of the Central Government. According to the decision of the cabinet, the government will discharge all the responsibilities of the existing and retired employees.

Such is the math of expenditure

The government spends Rs 5000 crore on the annual salary of ordnance factory workers
3000 crores are also spent on the operational activities of these ordnance factories.

The government will protect the interests of Ordnance Factory Board employees

According to officials, the Central Government has decided to merge the Ordnance Factory Board, but at the same time, it has taken full care of protecting the interests of its employees. As per the information received, there has been no change in the service conditions of Group A, B and C employees. The Central Government will bear the pension and other allowances of the employees. The Central Government has decided that for the next two years, without any change in the service conditions of Group A, B and C employees attached to the production unit, they will be transferred to seven corporate companies to be formed on a replacement basis.

It was in 1775 that British authorities accepted the establishment of the Board of Ordnance in Fort William, Kolkata.  
In 1787 a gun powder factory was established at Ishapore West Bengal which started production in 1791. The British set up 18 ordnance factories and the rest have come up after India became independent in 1947. “This move would allow these companies autonomy, as well as help, improve accountability and efficiency,” Rajnath Singh said.

The government has also decided to delegate the authority of the Cabinet to the Empowered Group of Ministers, constituted under the minister of defense, to decide upon the matters related to the implementation of the aforesaid government decisions and other incidental matters.

Rajnath Singh heads this empowered group of ministers and has the home minister, the finance minister, the minister for labour and the minister of state in the PMO.