New Delhi: Homemade Howitzer The Dhanush towed artillery gun (indigenised Bofors FH-77), developed by the OFB.
Thursday is the last day of the Ordnance Factory Board (OFB) in existence. The Ordnance Factory Board, which has been supplying arms, ammunition and clothing to armed forces in India, stands dissolved from October 1.
WHAT IT MEANS?
The OFB controls 41 factories employing over 70,000 employees. It has an annual turnover of about Rs 19,000 crore. All of this will be split into seven Defence Public Sector Units (DPSUs), fully owned by the government.
WHEN THE DECISION WAS TAKEN?
The plan to dissolve the OFB had been on the agenda of the government for quite some time, having been proposed soon after the 2019 Lok Sabha election. The Union Cabinet approved the plan on June 16 this year. On Tuesday, the government announced that the Ordnance Factory Board would cease to exist from October 1.
WHAT ARE THE SEVEN DPSUs?
The seven successor DPSUs are:
Armoured Vehicles Nigam
Advanced Weapons and Equipment India
All seven DPSUs will function as corporate entities with 100 per cent ownership lying with the government.
WHAT HAPPENS TO EMPLOYEES?
In its statement, the defence ministry said the employees belonging to Groups A, B and C of the dissolved OFB from both production and non-production units would be transferred to the new DPSUs.
These employees would be treated on terms of the Foreign Service but they would not be entitled to deputation allowance. It would be deemed deputation for a period of two years beginning October 1.
Four committees have been set up since 2000 to suggest reforms in the defence sector. Except the one formed by former Defence Minister Manohar Parrikar, all three —TKS Nair Committee (2000), Vijay Kelkar Committee (2005), and Vice Admiral Raman Puri Committee (2015) — favoured corporatisation of the OFB.
The fourth committee headed by Lt General DB Shekatkar differed, favouring regular audits of all ordnance units and taking corrective measures to improve their performance.
Replacing the OFB with corporate entities brings these DPSUs under the purview of the Companies Act, a change the government hopes would bring cost-competitiveness in India’s defence production sector.
HOW LONG OFB FUNCTIONED?
According to the OFB website of the government, the industrial establishment of the OFB happened in 1801. This makes the OFB a 220-year-old establishment.
However, its origin could be traced to 1775, when the East India Company of England approved the establishment of the Board of Ordnance in Fort William, Kolkata with its aim to consolidate its military, economic and political hold on India.
The East India Company established a gunpowder factory at Ishapore, the British spelling for Ichhapur, in the North 24 Paraganas district of West Bengal in 1787. In 1801, came the Gun Carriage Agency at Cossipore (also spelt as Cossipur and Kashipur) in Kolkata, marking the beginning of the OFC.
The nomenclature ‘Ordnance Factory Board’ and its outgoing form came into existence in 1979 during the time of the Janata Party government at the Centre.
The government hopes that the decision to replace the Ordnance Factory Board with seven DPSUs would reform the defence production sector in India. The government aims at public-private partnerships to bring a similar change in the defence sector as the Green Revolution in agriculture and the White Revolution in dairy.
“We have opened up opportunities for mega defence programmes, including fighter aircraft, helicopters, tanks and submarines through a strategic partnership model that will help our private companies become global giants in the years to come,” Defence Minister Rajnath Singh said earlier this week when he announced the end date for the OFB.