The Union Cabinet on Wednesday approved the corporatisation of Ordnance Factory Board (OFB) by splitting it into seven entities to improve autonomy, accountability and efficiency. There are 42 ordnance factories spread all over the country and its employees had opposed corporatisation when it was mooted more than two years back.
There are more than 82,000 employees in the ordnance factories and many of them had resorted a stir in 2019 and gave a notice for agitation last year also against the proposal to corporatize these units. Based in Kolkata, the Ordnance factories have a history of more than 200 years old and now manufacture guns, missiles, tanks and other such equipment for the armed forces.
The Cabinet Committee on Security (CCS) last year in July had approved to convert the Ordnance Factory Board (OFB) “into one or more than one 100 per cent Government-owned corporate entities”.
The official communique regarding this also said then the corporatisation of OFB will improve its autonomy, accountability and efficiency in Ordnance Supplies.
It said the government has taken note of the strike by workers of the OFB against the proposed corporatisation and their concerns in the notice dated 04.08.2020 from the three recognized Federations of Defence Civilian Employees, proposing to call an indefinite strike from 06.00 am of 12.10.2020 by the Defence Civilian Employees of Ordnance Factories against the government move to corporatize OFB.
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 the OFB, including transition support and redeployment plan of employees while safeguarding their wages and retirement benefits.
The 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 the OFB is nominated as a production agency for supply of core items to the armed forces, no comparison with international prices can be made. This information was given by Minister of State for defence Shripad Naik in a written reply to Santanu Sen in the Rajya Sabha on September 19 last year.
The EGoM comprised Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Minister for Law and Justice Ravi Shankar Prasad, Minister of State for Labour and Employment Santosh Kumar Gangwar and Minister of State for Personnel, Public Grievance and Pension Dr Jitendra Singh.