Hello defence lovers! The Indian government has finally decided to corporatize the Ordinance factory Board. In this article, we will discuss why the government has decided to corporatise the OFB and how the corporatisation of OFB will benefit the Indian defence industry.
The Ordnance Factory Board
Before we begin our discussion on the corporatisation of OFB, lets us first look at the history of this company very briefly. The first ordinance factory in India can be traced back to 1712 when a dutch company established a gun powder factory at Ichapore. Later the British built many other factories. The ordnance factory board was officially recognised in 1775 making the company 246 years old. After the Independence, these factories were handed over to the Indian government. All these factories operate under the Ordnance Factory Board.
At present, there are 41 ordinance factories all over India that manufacture a large variety of defence equipment ranging from a 9mm bullet to a T90 tank. The list of all ordinance factories is given below. If you wish you can read about every ordinance factory in details by visiting their respective websites.
- Ammunition Factory Kirkee (AFK)
- Cordite Factory Aravankadu (CFA)
- Engine Factory Avadi (EFA)
- Field Gun Factory Kanpur (FGK)
- Gun Carriage Factory Jabalpur (GCF)
- Grey Iron Foundry Jabalpur (GIF)
- Gun & Shell Factory Cossipore (GSF)
- Heavy Alloy Penetrator Project, Tiruchirapalli (HAPP)
- High Explosive Factory Kirkee (HEF)
- Heavy Vehicle Factory, Avadi (HVF)
- Machine Tool Prototype Factory Ambarnath (MPF)
- Metal & Steel Factory (MSF)
- Ordnance Clothing Factory Avadi (OCFAV)
- Ordnance Cable Factory Chandigarh (OCFC)
- Ordnance Clothing Factory Shahjahanpur (OCFS)
- Ordnance Equipment Factory Kanpur (OEFC)
- Ordnance Equipement Factory Hazratpur (OEFHZ)
- Ordnance Factory Ambarnath (OFA)
- Ordnance Factory Ambajhari (OFAJ)
- Ordnance Factory Bhandara (OFBA)
- Ordnance Factory Bhusawal (OFBH)
- Ordnance Factory Bolangir (OFBOL)
- Ordnance Factory Kanpur (OFC)
- Ordnance Factory Chanda (OFCH)
- Ordnance Factory Dum Dum (OFDC)
- Ordnance Factory Dehu Road (OFDR)
- Ordnance Factory Dehradun (OFDUN)
- Ordnance Factory Itarsi (OFI)
- Ordnance Factory Khamaria (OFK)
- Ordnance Factory Katni (OFKAT)
- Ordnance Factory Muradnagar (OFM)
- Ordnance Factory Project Nalanda (OFN)
- Ordnance Factory Project, Korwa (OFPKR)
- Ordnance Factory Project Medak (OFPM)
- Ordnance Factory Tiruchirapalli (OFT)
- Ordnance Factory Varangaon (OFV)
- Opo-Electronic Factory Dehradun (OLF)
- Ordnance Parachute Factory Kanpur (OPF)
- Rifle Factory Ishapore (RFI)
- Small Arms Factory Kanpur (SAF)
- Vehicle Factory Jabalpur (VFJ)
Now this 300 years old company is going to be dissolved for good. Now let us understand why the Indian government has decided to split the ordnance factory board into 7 different companies which will be Public Sector Undertakings (PSU).
Corporatisation of OFB
Last year, in May 2020, the government announced to corporatize the OFB units. It was a part of PM Narendra Modi’s plan to make India self-reliant in defence sectors under the Atmanirbhar Bharat mission. However, the move faced strong resistance from 80000 plus workers who threatened the government with indefinite strikes. Many strikes were organised but now the Indian government has finally decided to split the companies into 7 different PSUs. The OFB will be split into seven government-owned entities that will produce ammunition and explosives, vehicles, weapons and equipment, troop comfort items, optoelectronics gear, parachutes, and ancillary products.
The government has assured that all the workers (groups A, B, and C) will continue to get all the benefits under these 7 PSUs, which they enjoy now. No privileges or facilities will be taken away from them.
How This Move Will Benefit India’s Defence Industry?
The OFB is one of the most inefficient organizations in India. As of now, it enjoys complete monopoly over the small arms sector. Perhaps this was the reason why India is not able to develop a good assault rifle to this day. The OFB is often accused of producing faulty ammunition which has caused multiple accidents, some of which were fatal. The move of the corporatisation of OFB will definitely deal with some of these problems. Let us understand how.
The corporatisation of OFB will enhance its efficiency and innovation. The government is also ending its monopoly in many sectors by allowing private players to manufacture the same goods which earlier ordnance factories produced exclusively. This will ensure healthy competition and would encourage greater innovation.
The splitting of ordnance factories into 7 different unit will help the government to focus on the sector which is lacking. For example, because of faulty ammunition, the entire OFB is blamed. However, there are many factories which are working in a great way, which needs to be praised.
This move will also benefit the defence exports. Now a foreign customer can directly approach the respective company manufacturing the particular item required by the customer. This will hasten the overall procedure. This will help the 7 companies to widen their customer base.
Overall government’s decision of corporatisation of OFB is historic and it will definitely strengthen the defence manufacturing capabilities of India.