Defence Minister Rajnath Singh held a high-level meeting to explore all possible actions to make ordinance factories more robust as per the prevailing and futuristic defence requirements of the country, sources said on Wednesday.
The meeting comes amid the government”s decision to convert the Ordnance Factory Board (OFB) into 100 per cent government-owned corporate entities.
The OFB is a defence ministry entity and supplies critical arms and ammunition to the three armed forces and the paramilitary.
In its meeting held in July last year, the Cabinet Committee on Security (CCS), the country”s top decision-making body on security-related issues, approved to convert the Ordnance Factory Board (OFB) “into one or more than one 100 per cent government-owned corporate entities”.
Addressing a webinar last week on the effective implementation of the Union Budget”s provisions in the defence sector, Prime Minister Narendra Modi had said, “Before independence, we used to have hundreds of ordnance factories. In both the world wars, weapons at large scale were exported from India. But for various reasons, this system was not strengthened as much as it should have been after independence.”
“The condition is such that even for small arms, we have to look at other nations. India is amongst the biggest defence importers and this is not a matter of pride,” Modi stressed.
In a reply to Parliament last year, Shripad Naik, Minister of State in the Defence Ministry, had said, “The corporatisation of OFB will improve its autonomy, accountability and efficiency in ordnance supplies.”
The move to corporatise ordnance factories spread across the country met with resistance from the labour unions.
Naik added that the government took note of the concerns of workers of the OFB against the proposed corporatisation.
“An Empowered Group of Ministers (EGoM) has been constituted under the Chairmanship of Minister of Defence to oversee and guide the entire process of corporatisation of OFB, including transition support and redeployment plan of employees while safeguarding their wages and retirement benefits,” he had then said.
In a reply to a parliamentary panel last month, the defence ministry said the existing order book is “skewed” and ordnance factories manufacturing large calibre ammunition, Pinaka rockets, small arms and small arms ammunition are “sub-optimally loaded”.
The ministry further said that in the last five years, the ordnance factories have completed 100 T-90 Tanks, creation of facilities for production of 1,000 Pinaka rockets, augmentation of capacity for manufacturing of Mine Protected Vehicle (MPV), spares for T-72 and T-90 tanks, and T-72 variants.
Naik had said in Parliament that OFB products are priced on a cost-based methodology without charging any profit over the cost of production for supply to the armed forces. Since OFB is nominated as a production agency for supply of core items to the armed forces, no comparison with international prices can be made, he added.
To a question on what steps have been taken to modernise the ordnance factories across the country through introduction of state-of-the-art technologies, the ministry last month said modernisation in OFs is a continuous process.
“To keep pace with the contemporary manufacturing technologies, OFB prepares a modernisation plan for technological up-gradation as well as capacity enhancements,” it said.