Ordnance Factory Board Will Be Bifurcated Into Seven Companies

Ordnance Factory Board will be divided into seven different government companies, a big step in the field of defense production.

The Union Cabinet has approved the proposal to bifurcate the Ordnance Factory Board into seven separate state-owned companies with professional management for the much-awaited reform of the defense manufacturing sector.

With this big step of the government, these newly formed companies related to defense production will get more autonomy, improving their efficiency and increasing accountability.

Group of ministers will now decide.

These reforms have been embodied to increase the productivity of the Ordnance Factory Board and make it profitable, thereby enhancing its expertise and making it more competitive.

For smooth implementation of this decision, the government has also decided to delegate the powers of the cabinet to the empowered group of ministers under Defense Minister Rajnath Singh.

This Group of Ministers will now decide on implementation-related matters and other relevant matters.

Group of seven government companies.

In a cabinet meeting chaired by Prime Minister Narendra Modi, it was decided that the Ordnance Factory Board, which was till now functioning as a department of the Ministry of Defense, will now be a group of seven government companies under it.

For the last two decades, continuous studies were being done for changes and improvements in the functioning of OFB and several high-level committees constituted for it had made recommendations for improvement in its functioning.

The government took this step.

The Defense Ministry has accordingly converted the Ordnance Factory Boards into companies to establish them as the mainstay of self-reliance for the defense preparedness of the Armed Forces.

The Government has ensured that the service conditions of the existing Central Government employees of the Board will be protected.

41 factories will be included.

41 factories will be included under seven different companies of OFB in which the Ordnance and Explosives group will be mainly engaged in the production of ammunition and revolvers etc.

Its purpose will be to reduce the dependence on imports and also look at the possibilities of exports.

The vehicle group will primarily be involved in the production of defense movement and combat vehicles such as tanks, trawls, anti-landmine vehicles, etc.

The government expects the company to expand its share in the domestic market as well as explore business opportunities in the world market.

Productivity will increase.

Arms and Equipment Group’s company will manufacture small, medium, and large-caliber guns. It will increase its share in the domestic defense market by diversifying products while reducing exports.

Other companies formed from OFB are Troops Comfort Items Group, Ancillary Group, Opto-Electronics Group, and Parachute Group of Companies.

The government expects that this restructuring will enhance the productivity and competitiveness of OFBs and will also lead to a qualitative improvement in expenditure.

Clear commitment.

In implementing this reform in OFB, the Government has made clear its commitment to protecting the interests of its employees.

It has been decided that all the employees of OFB (Groups A, B, and C) belonging to the production unit shall be transferred on automatic deputation initially for a period of two years without any change in their service conditions as Central Government employees.