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  • Paras Sharma

Corporatize Ordnance Factory Board: An Efficient Step

Written By: Vaibhav Goyal, Student, University Institute Of Legal Studies, Panjab University (SSGRC, Hsp.) Chandigarh


Taking a general direction to the PM's wish for a self-reliant India, the division of Military Affairs, Ministry of Defense, as of late arranged elite of 101 things to be banned from import past the specified course of events. This is a significant advance towards turning out to be confident in protection. It offers a chance to India's guard fabricating industry to smash up creation utilizing its plan and improvement capacities or receiving advances created by the Defense Research and Development Organization (DRDO) to meet the prerequisites o0f the Armed Forces.

In May, the legislature had declared that corporatization of the OFB would be attempted to improve independence, responsibility, and effectiveness. OFB workers had contradicted the move.

The Kolkata-settled OFB with 41 industrial facilities spread the nation over capacities as an office under the Department of Defense Production. Because of this, each choice and activity need the endorsement of the Cabinet, one authority said. For example, in 2001, the OFB was to set up a plant at Nalanda in Bihar to manufacture bi-modular charges for the Army with an initial investment of around ₹800 crores which went up to ₹2,000 crores later. Be that as it may, the plant had not been set up to date, the authority expressed.

Indian Ordnance Factories is the oldest and biggest mechanical production that operates under the Department of Defense Production of the Ministry of Defense. The weapons processing plants structure a coordinated base for indigenous creation of protection equipment and hardware, with the essential goal of confidence in furnishing the military with best in class combat zone supplies.

India has been one of the greatest worldwide merchants of the protection things. Any nation that imports a more noteworthy level of its safeguard things will consistently stay helpless against the complexities of international relations. Diminishing import reliance is an unquestionable requirement.

At whatever point there has been a fringe conflict or a significant fear assault, India has to turn o Emergency buys. It demonstrates that our statute Factory Board (OFB) has not offered the necessary help and the framework laid by the Ministry of Defense for the obtainment of the weapons and Equipment inside time isn't working effectively, bringing about Emergency buys during an emergency.

The OFB has a monopolistic favourable position of gracefully. Negligible advancement and innovation improvement have laid to low profitability. The rebuilding of the OFB has been inspected by different committees previously. The current set up of the mandate processing plants faces the possibilities of outdated nature. Except if there is a movement to a fresher innovation, the desire from the industrial facilities won't be met.

The change of OFB into Ordnance Factory Corporation Limited has been suggested by different panels. This will empower them to depend on their qualities, incomes, and surpluses for development. The proposed structure would likewise empower fitting future changes under the dynamic worldwide condition identified with the creation of protection products.

The TKA Nair Committee (2000), Dr Vijay Kelkar Committee (2004), Raman Puri Committee (2015), and Shekhtkar Committee (2016) have suggested the corporatization of the OFB. In light of these reports and to fortify confidence in safeguard creation, the legislature chose in May 2020 that under the Atamnirbhar bundle, the corporatization of the OFB would be embraced to improve self-rule, responsibility, and productivity in mandate supplies.

The HLOC (high-level official committee) was formed in September a year ago after the three alliances had called a strike to contradict the corporatization move, which was started a year ago. In those days, the leagues had dismissed the terms of reference of the HLOC. On June 5 this year, the HLOC again started the discourse with the organizations of the labourers and gazetted officials of the OFB.

The three key alliances of safeguard labourers, which speak to near 85 percent of the 82,000-in number workforce from 41 arms production lines the nation over, have emphatically contradicted the proposed corporatization since its initiation. The strike polling form called by these leagues against the proposition had finished up on June 17, in which labourers had cast a ballot for an inconclusive strike. In any case, thinking about the circumstance along the Line of Actual Control (LAC) with China, the date of the strike is scheduled to be reported not long from now.

The three alliances are Bhartiya Pratiraksha Mazdoor Sangh (BPMS), an arm of RSS member Bharatiya Mazdoor Sangh, league of Left associations All India Defense Employees' Federation (AIDEF), and the Indian National Defense Workers' Federation (INDWF) of the Congress' INTUC. The alliances have contended that a corporate element would not have the option to endure the interesting business sector condition of safeguard items, which have an entirely shaky interest and gracefully elements.

The corporatization of the OFB will address some major questions that plague the ordnance factory's facility's significant expense and low quality. Instances of deficient gatherings and the segments have been featured on various fora. It is basic to change the current working of the OFB as a joined office of the Ministry of Defense and a planned substance since it is contrary to the Modern techniques for creation and practices. Parting of OFB into three or four portions as fitting and changing over these fragmented Boards into guard public segment endeavors (DPSU) as prescribed is by all accounts the route forward. It is the most fitting chance to make the late stride of the corporatization of the OFB to address the key difficulties of mandate plants for making our district independent in protection creation.

An OFB official cases that the weapons processing plants cannot be run on a business premise since a 'war hold' must be kept at standard with the military to keep up the ability to deal with a flood in requests in a war-like circumstance. "No private area will have the option to keep up the inert limit as a war save."

The main products of the OFB consist of tanks and shielded vehicles, big guns firearms, little arms, and weapons of a few kinds and ammo. It likewise delivers troop comfort hardware like regalia, tents, and boots. The principal clients are the military including Army, Navy and Air Force, and the paramilitary powers.

"Endeavors have been made lately to grow the fare market. Weapons manufacturing plants were set up as 'hostage focuses' to serve the necessities of the military, however, they have been confronting the presentation issues for quite a while," says a protection service official, while including that worries have been brought up in different quarters throughout the most recent couple of decades for the working of the OFB which "needs proficient demeanour as is required from a creative association".

While bringing up the imposing business model in gracefully, the service official says that the OFB has from the beginning provided items to the military on assignment premise, which has not generally offered motivation to the load up to improve its nature of items and doesn't have a powerful arrangement of getting client's input on quality and opportune conveyance issues.

"The legislature has informed 275 non-core items of OFB, which are currently accessible to be secured from the market. These things until now saved for OFB are effectively accessible in the market," the authority brought up.

The Defense Ministry has likewise raised the low-quality issues of OFB items that have been a consistent reason for concern and the significant expense of items because of high overhead charges in the OFB, including high upkeep charges, high administrative, and circuitous work charges.

"There is insignificant advancement and innovation improvement in the OFB. There is the low efficiency of plant and hardware and labour. Besides, working under the pad of government techniques and being the sole specialist co-op for military, there is no punishment for postponed conveyance to the clients," the authority included.

The service authorities accept that the current structure of the OFB is 'conflicting' with the necessity of a creative community, which requires a ton of adaptability at the administrative and practical level.

"The choices like the modernization of plant and apparatus, going into a joint endeavour with different organizations, going into a ToT (move of innovation) arrangement and so forth, all are dependent upon government guidelines and directions, lessening the influence and adaptability of any powerful creation and promoting unit. As an administration office, the OFB can't hold benefits and in this manner has no motivation to make benefits. All in all, the OFB in its current structure of departmental association may not be fitting for completing creation exercises and remaining in rivalry with its rivals in the private business, who have all the administrative and specialized adaptability required for creation and showcasing exercises," the service official further said.


  • Pradip R Sagar, Why MoD wants 'corporatization' of ordnance factories, The Week, August 21, 2019

  • Manu Pubby, Ordnance Factory Board (OFB) corporatization gains pace as army seeks reliable supplier, The Economic Times, August 23, 2020

  • Lt Gen P R Shankar (Retd.), Why Corporatisation of ordnance board is a must, The New Indian Express, August 11, 2020

  • Raksha Rajya Mantri Shri Shripad Naik in a written reply to Dr.Santanu Sen in Rajya Sabha, Corporatisation of OFB, PIB Delhi, September 19, 2020

  • Lt Gen Vinod Bhatia (retd), Aatmanirbhar Bharat: Corporatisation of OFB, The Daily Guardian, August 10, 2020

  • Anit Mukherjee, The Absent Dialogue Politicians, Bureaucrats, and the Military in India, Oxford University Press, 2019

  • Laxman Kumar Behera, India’s Defence Economy Planning, Budgeting, Industry and Procurement, Taylor & Francis, 2020


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