After the much-needed dismantling of the Ordnance Factory Board (OFB) to boost its efficiency and competitiveness, Prime Minister Narendra Modi on October 15 will formally launch seven new defence companies carved out of the OFB, four months after Union Cabinet cleared the board’s corporatisation in a much-awaited reform in the country’s defence manufacturing sector.
October 15 also happens to be the occasion of Vijayadashami, also known as Dussehra which is considered an auspicious day to begin any new venture and the new companies will be formally launched through video conference by the PM.
The government issued an order last month, dissolving OFB with effect from October 1 and now it has been split into seven government-owned entities that will produce ammunition and explosives, vehicles, weapons and equipment, troop comfort items, opto-electronics gear, parachutes and ancillary products.
These new companies have been named Advanced Weapons and Equipment India Limited, Troop Comforts Limited, India Optel Limited, Munitions India Limited, Avani Armoured Vehicles, Gliders India Limited and Yantra India Limited.
“All the indents previously placed on the OFBs by various services, CAPFs and state police have been converted into deemed contracts. These deemed contracts numbering 66 have a cumulative value of more than ₹65,000 crore,” said one of the officials.
“This process has been smoothly concluded following months of extensive consultations with all the stakeholders prior to the unveiling of the new defence companies and mobilisation advance worth over ₹7,100 crore for the financial year 2021-22 has been paid to the DPSUs by the respective indentors,” he added.
Ordnance factories were engaged in the production of tanks, armoured personnel carriers, mine-protected vehicles, bombs, rockets, artillery guns, anti-aircraft guns, parachutes, small arms, clothing and leather equipment for soldiers. But the weapons made by these factories were substandard which resulted in the death of several of our troops who are end-user.
The thumb rule of weapons manufacturing is that it must never cause harm to the user and now the government expects the seven newly formed companies will be professionally managed and it will not only increase in quality but also increase their share in the domestic market through better capacity utilisation and also tap new export opportunities.
This was a much-needed reform that has been discussed for the last two decades and several high-level committees underlined the need to improve the functioning of OFB to augment the country’s defence preparedness.
The Comptroller and Auditor General in fact raised serious questions about the quality of products supplied by OFB and its overall performance in several past reports. But the reform was thwarted because of politics, bureaucratic resistance, trade union and it must be noted that the factories were controlled by the board employed at least 70,000 people who have been against any move to corporatize it.
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