NEW DELHI: At a significant long-pending defence reform, the authorities on Wednesday approved the breaking of this floundering Ordnance Factory Board (OFB) and its own 41 factories to seven corporate entities to significantly enhance its function as the primary supplier of ammunition, arms and clothing into the armed forces.
Even the PM Narendra Modi-led Cabinet accepted the”corporatization” of OFB, that includes an yearly turnover of approximately Rs 19,000 crore, in to seven 100% Nominal entities working with ammunition and explosives, vehicles (tanks, fight and mine-protected automobiles, trawls), weapons and gear (artillery and also anti-craft firearms, rifles), troop relaxation products, optoelectronics, and parachutes.
“it is a large, historical decision in the viewpoint of national protection.
The restructuring is likely to create OFB autonomous, even more effective and cost-efficient in addition to improve quality and boost exports.
The general goal is to create India’atmanirbhar’ (self-reliant) in defence preparedness,” said defence ministry Rajnath Singh.
Singh, who heads the empowered group of ministers to manage OFB’s transformation, also took pains to assuage the worries of about 70,000 OFB workers, that have gone on attacks to protest against corporatization.
“There will not be any change in their support requirements (wages, retirement and other benefits)…They shouldn’t be concerned,” he explained.
Each of OFB workers (Team A, B & C) belonging to both manufacturing units will then be moved into the corporate entities ‘deemed deputation’ to the initial period of 2 decades, without changing their support requirements as fundamental government workers.
The OFB reform is urgently needed in the background of this 13-lakh powerful Army repeatedly sounding the alert over the unacceptably significant number of deaths, accidents and accidents occurring from the area because of the inferior and faulty caliber of pollutants being provided such as tanks, artillery, air defence as well as other firearms, as previously reported by TOI.
Together with OFB providing around 90 of their complete 163 kinds of ammunition used by the Army, the power was reporting a minumum of one accident each week, on an average, within the last several decades.
The issues plaguing the OFB include the large expenses of goods because of excessive overhead fees to inconsistent standard and enormous delays in provides.
OFB also suffers from a complete absence of technology and innovation development.
According to a rough estimate, almost 75 percent of this manufacturing from OFB units relies on imported technology,” said officials.
The authorities evaluation is that OFB corporatization can increase its earnings to Rs 30,000 crore from 2024-25, improve its exports to 25 percent of their turnover, and boost self-reliance in engineering by the present 20-25% to 75 percent by 2028-29.
“The Cabinet decision will enable both new firms freedom in addition to help enhance efficiency and accountability in the operation of these 41 factories beneath these,” said an official.
“It helps overcome many flaws in the current system by removing wasteful supply chains and offer these businesses incentive to become aggressive and investigate new market opportunities, such as exports.
As a poor division of the ministry until today, OFB couldn’t retain gains and consequently had no incentive to produce profits,” he further added.