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Government approves OFB divided into 7 entities to improve supplies of arms and ammunition | India News

NEW DELHI: In a major long-pending defense reform, the government on Wednesday approved the division of the Ordnance Factory Board (OFB) and its 41 factories into seven corporate entities to enhance its operation as the leading arms supplier , ammunition and clothing. to the armed forces.
The cabinet led by Prime Minister Narendra Modi approved the “corporatization” of the OFB, which has an annual turnover of around Rs 19 billion, into seven 100% government-owned entities dealing with ammunition and explosives, vehicles (tanks , combat vehicles and mine-protected vehicles). , trawl nets), weapons and equipment (artillery and anti-aircraft guns, rifles), comfort items for the troops, optoelectronics and parachutes.
“It is an important and historic decision from a national security point of view. The restructuring will make OFB autonomous, more productive and profitable, as well as improve quality and increase exports. The overall goal is to make India ‘atmanirbhar’ (self-sufficient) in preparing for defense, ”said Defense Minister Rajnath Singh.
Singh, who heads the group of empowered ministers to oversee OFB’s transformation, went to the trouble of allaying the concerns of around 70,000 OFB employees, who had previously held strikes to protest against corporatization. “There will be no changes in their conditions of service (salaries, pensions and other benefits) … They should not worry,” he said.
All OFB employees (Group A, B and C) belonging to the production units will now be transferred to the corporate entities in “considered delegation” for an initial period of two years, without altering their conditions of service as government employees. central.
The OFB review is desperately required in the context of the 13 lakh Army force repeatedly sounding the alarm about the unacceptably high number of accidents, deaths and injuries taking place in the field due to poor and faulty quality of ammunition supplied for tanks. artillery, air defense and other weapons, as previously reported by TOI.
With the OFB supplying around 90 of the total 163 types of ammunition used by the Army, the force has been reporting at least one accident per week, on average, for the past several years.
The problems plaguing the OFB range from high product costs due to excessive overheads to inconsistent quality and long supply delays. OFB also suffers from a complete lack of innovation and technological development. By a rough estimate, nearly 75% of OFB units’ production is based on imported technology, officials said.
The government’s assessment is that OFB’s corporatization will help increase its turnover to Rs 30,000 crore by 2024-25, improve its exports to 25% of turnover, and increase self-sufficiency in technology from existing 20-25% to 75% by 2028 -29.
“The Cabinet decision will allow the autonomy of the seven new companies and will help improve accountability and efficiency in the operation of the 41 factories under them,” said an official.
“It will help overcome several shortcomings in the existing system by eliminating inefficient supply chains and provide these companies with an incentive to become competitive and explore new market opportunities, including exports. As a subordinate office of the Ministry of Defense until now, the OFB could not retain profits and therefore had no incentive to make profits, ”he added.



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