Centre dissolves ordnance factory board, transfers assets to seven DPSUs | Daily Current Affairs 2021
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Centre dissolves ordnance factory board, transfers assets to seven DPSUs

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Ordnance Factory Board

Dissolution of OFB: The Central Government recently issued orders for the dissolution of the Ordnance Factory Board (OFB) from October 1, 2021.

Key Highlights:

  • After 1st October 2021, its assets, employees and management would be transferred to seven newly constituted defence public sector undertakings (DPSUs).
  • The management, control, operations and maintenance of these 41 production units and identified non-production units would be transferred to the following seven government companies:
  • India Optel Ltd. 
  • Munitions India Ltd.
  • Armoured Vehicles Nigam Ltd.
  • Advanced Weapons and Equipment India Ltd.
  • Troop Comforts Ltd.
  • Yantra India Ltd.
  • Gliders India Ltd.
  • These 7 DPSUs will be 100 per cent state-owned.
  • This order will abolish OFB, an establishment which was accepted by the British in 1775.

Note: The 220-year old OFB was established in 1979. Its roots trace back to the establishment of the Board of Ordinance in 1775 in Fort William in Kolkata which was back then the base of Bengal operations of the East India Company.

How has the Central Government assured the OFB employees and workers?

  • As per Central Government’s order, all the employees of OFB i.e., over 70,000 employees (Group A, B and C) belonging to the production units and also the identified non-production units shall be transferred en masse to the new DPSUs on terms of foreign service.
  • They would be transferred without any deputation allowance initially for a period of two years.
  • The pay scales, allowances, medical facilities, career progression, leaves, and other services will be governed by the regulation and orders as applicable to the Central government servants.
  • The pension of existing employees and retirees too will be taken care of by the government.
  • New DPSUs are required to frame rules and regulations related to service conditions of absorbed employees.
  • A committee will be constituted to guide new DPSUs with respect to the absorption package.

Note: Currently, the OFB has a turnover of approximately Rs 19,000 crores.

Background:

  • The Union Cabinet, on June 16, had approved a long-awaited reform plan to corporatise the OFB, which has 41 factories, into seven fully government-owned corporate entities on the lines of DPSUs.
  • The Centre’s decision to dissolve OFB was conveyed by Finance Minister Nirmala Sitharaman as part of ‘Aatmanirbhar Bharat’.
  • All the employees of OFB (Group A, B and C) belonging to the production units and also the identified non-production units shall be transferred en masse to the new DPSUs on terms of foreign service without any deputation allowance initially for a period of two years.

What is the reason for restructuring the OFB?

  • OFB is being restructured with the aim of transforming it into productive and profitable assets, deepening specialization in product range, enhancing competitiveness and improving quality & cost-efficiency.

About OFB:

  • The Ordnance Factory Board (OFB) is an industrial organization, functioning under the Ministry of Defence (MoD), Government of India (GoI).
  • It is an organization of around 41 ordnance factories, 9 training institutes, 3 regional marketing centers and 4 regional controllers of safety.
  • It works in the field of Research, Development, Production, Testing, Marketing, and Logistics.
  • The OFB manufactures supplies, ammunition, and weapons that are used by the armed forces, police forces, and paramilitary forces.
  • The products include military-grade and civilian arms and ammunition, chemicals for missile systems, explosives, propellants, armoured vehicles, parachutes, optical and electronic devices, troop clothing, support equipment, and general store items for the armed forces.
  • In 1712, the Dutch Ostend Company’s Gun Powder Factory was established at Ichhapur.
  • The OFB came into existence on April 2, 1979 in the new form. 
  • It possesses 200 years of experience in defence production.
  • The OFB is headquartered at Kolkata, West Bengal.

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