Proposal for Corporatisation of Ordnance Factories Board

Proposal to convert Ordnance Factories under the OFB into a 100% Government owned public sector unit – PIB

Press Information Bureau
Government of India
Ministry of Defence

18-November-2019 19:10 IST

Proposal for Corporatisation of Ordnance Factories Board

There is a proposal to convert Ordnance Factories under the OFB into a 100% Government owned public sector unit to provide functional and financial autonomy and managerial flexibility so as to enable the organisation to grow at a faster pace and play a greater role in defence preparedness of the country while also adequately safeguarding the interests of the workers.

The Press Releases issued by the Ministry of Defence dated 14.08.2019, 16.08.2019 and 20.08.2019 are given below:

MoD reaches out to OFB employee unions on their strike notice

Posted On: 14 AUG 2019 8:14 PM by PIB Delhi

A team of senior officials led by Additional Secretary, Deptt. of Defence Production along with Chairman Ordinance Factory Board met the office bearers of the All India Defence Employees Federation, Indian National Defence Workers Federation, Bhartiya Pratiksha Mazdoor Sangh and Confederation of Defence Recognized Association here today on the issue of strike notice given by them starting August 20, 2019.

The meeting lasted for nearly two hours in which both parties constructively engaged themselves in a candid and open discussion of each other’s’ viewpoint. It was decided to keep the process of dialogue open to arrive at a mutual understanding.

ABB/Nampi/DK/Savvy

MoD clarifies there is no proposal to privatise OFB

Posted On: 16 AUG 2019 7:47 PM by PIB Delhi

In continuation of the meeting held on August 14, a Committee of senior officials of Ministry of Defenceled by Additional Secretary, Department of Defence Production along with Chairman, Ordnance Factory Board (OFB) once again met the office bearers of the All India Defence Employees Federation, Indian National Defence Workers Federation, BhartiyaPratikshaMazdoorSangh and Confederation of Defence Recognized Association here today on the issue of Strike notice given by them starting with effect from August 20, 2019. The meeting was also attended by officials from the Ministry of Labour& Employment, Government of India.

The Committee also pointed out that the employees’ call for 30 days’ strike was unprecedented, especially when Government has already agreed to their demand to hold discussions at the MoD level and is in process of continuously engaging with them.

The Committee explained to the employee organisations that there is no proposal to privatise OFB. The proposal under consideration of Government is to make it into Defence Public Sector Undertakings (DPSUs), which is 100 per cent Government owned. Rumours being spread that OFB is being privatised are misguiding and with the intent to mislead the workers. Corporatisation of OFB will bring OFB at par with other DPSUs of MoD. This is in the interest of OFB as it will provide operational freedom and flexibility to OFB which it presently lacks. Besides, the interests of the workers will be adequately safeguarded in any decision taken on the subject.

The Committee also pointed out that Government has been continuously trying to strengthen the functioning of OFB, including having taken several steps to modernise the factories, carry out capital upgradation, re-train and re-skill OFB employees at Government costs, enable development of products and components with indigenous technology.The Committee urged the employee organisations to recognise Government’s efforts to make OFB into a competitive, productive and efficient organisation with higher turnover and enhanced profitability, which would also be in the interest of the employees. Therefore, the Committee once again urged the employee organisations to withdraw their proposed strike.

ABB/Nampi/DK/Savvy/MTJ

Raksha Mantri Shri Rajnath Singh calls for increased private sector participation in Make in India in Defence; underlines the need to reduce dependence on imports

Posted On: 20 AUG 2019 3:34 PM by PIB Delhi

Raksha Mantri Shri Rajnath Singh today emphasised the need to progressively reduce dependence on foreign manufacturers and indigenously develop comprehensive capabilities in the defence sector. Delivering the inaugural address at the seminar on ‘Modernisation and Indigenisation plans of the Indian Air Force’ in New Delhi, Shri Rajnath Singh urged the private industry to take advantage of the policy initiatives of the Government and engage with defence services, Defence Public Sector Undertakings (DPSUs) and Ordnance Factory Board (OFB) for meeting their indigenisation demands. He reiterated the government’s commitment to resolving any outstanding issue in the way of growth and development of Indigenous Industries in defence sector. He asked the industry not to expect any short-term returns but invest for long term gains.

Raksha Mantri described Indian Air Force as a technologically advanced and extremely potent force saying that the recent offensive against terror outfits in our neighbourhood speaks volumes about the reach and lethality of the formidable arm of the Armed Forces. Indian Air Force, besides Army and Navy, needs to keep pace with the advancements in technology for enhancing operational capabilities, he added.

Recalling Prime Minister Shri Narendra Modi’s call to modernise our Armed Forces, Shri Rajnath Singh said efforts are being made to increase the participation of the private sector in ‘Make in India’ in defence sector.

Listing out the Government’s initiatives to promote ‘Make in India’, Raksha Mantri said foreign investment up to 49 per cent was allowed through automatic route and up to 100 per cent under Government route on case-to-case basis. He urged foreign Original Equipment Manufacturers (OEMs) to establish manufacturing facilities in India adding that a number of opportunities are available to foreign companies through FDI, Joint Ventures or the defence offset route. Shri Rajnath Singh also said the process of defence offset implementation has been streamlined and one of the major demands of the industry to reinstate the provision of services for discharge of offsets has now been provided.

Shri Rajnath Singh announced approval for use of test facilities of government entities for the private industry to meet the best quality standards required for defence manufacturing. He said the decision to this effect has been taken after incorporating the comments of the stakeholders particularly indigenous defence manufacturers. Shri Rajnath Singh expressed hope that the synergy between government’s efforts and industry participation will help fulfil the long-cherished dream of making India a front runner in defence production.

Raksha Mantri added that comprehensive outsourcing and vendor development guidelines for DPSUs and OFB to promote participation of private sector, particularly MSMEs in defence production. He said indigenisation requirements of Hindustan Aeronautics Limited (HAL), OFB, DPSUs, Army, Air Force and Navy have also been hosted on Ministry of Defence (MoD) website for the benefit of the private industry.

Raksha Mantri said the defence products list for issuing industrial licenses under Industry Development and Regulation (IDR) Act has been revised adding that it has reduced the entry barriers for the industry especially the small and medium segment. The initial validity of Industrial license has been increased from three years to fifteen years with a provision to further extend it by three years on a case-to-case basis, he added.

Shri Rajnath Singh also referred to the Technology Development Fund (TDF) Scheme which has been established under the aegis of Defence Research and Development Organisation (DRDO) to promote self-reliance in Defence Technology as part of ‘Make in India’ initiative. He said the scheme will encourage participation of public/private industries especially MSMEs so as to create an ecosystem for enhancing cutting edge technology capability for defence application.

In his keynote address, Chief of Air Staff Air Chief Marshal Birender Singh Dhanoa pitched for inhouse manufacturing of defence equipment and called for fine tuning the capabilities to meet the requirements. He said there is a need to replace obsolete war-fighting equipment with indigenous technology and bridge technological gaps in the defence sector. The Air Force is always alert on the border irrespective if there is any movement or not, he added.

Two books on indigenisation efforts of defence equipment were also released on the occasion.

Air Officer-in charge Maintenance Air Marshal S. Chaoudhary, Principal Adviser (Defence), Confederation of Indian Industry (CII) Lt. Gen. JP Nehra (Retd.), Member, Society of Indian Defence Manufacturers (SIDM) and Chairman CII (Northern Region) Satish Kumar Kaura, delegates of the industry and Armed Forces personnel were also present.

ABB/Nampi/Savvy/MTJ

The Press Releases do not make any mention of pricing of Ordnance Factory Board (OFB) products.

This information was given by Raksha Rajya Mantri Shri Shripad Naik in a written reply to ShriM. Shanmugamin Rajya Sabha today.

ABB/SS/DK/Savvy/MTJ

Source: PIB

Also check the following links related to this topic:

Settlement of the demand of the Staff Side of MoD to allot salary expenditure separately to the Ordnance Factories

Ordnance Factories strike called off – PIB

Ordnance Factories should be Corporatized as per Kelkar Committee