The Union Cabinet has approved the corporatization of the British-era Ordnance Factory Board (OFB) located in Kolkata which has 41 factories.
- The 246-year old OFB will be dissolved and replaced seven new fully government-owned corporate entities on the lines of Defence Public Sector Undertakings (DPSU).
- The corporatization process by the cabinet would be supervised by the Empowered Group of Ministers (EGM) chaired by Rajnath Singh and this EGM would address any issue that may arise during the course of the implementation.
- The creation of the entities will be 100 percent owned by the government.
- There would be no change in the service conditions of the OFB employees.
- All IFB employees (Group A, B, and C) from different production units will be transferred to the corporate entities on deemed deputation for an initial period of 2 years.
- The transformation is likely to take place by the end of the year.
Purpose of Restructuring OFB:
- This decision was taken from the perspective of becoming Atmanirbhar in terms of national security.
- The move to replace the OFB with the seven corporate entities will allow these companies autonomy, as well as help, improve accountability and efficiency.
- The restructuring is aimed at the following:
- Transforming the ordnance factories into productive and profitable assets
- Deepening their specialization in product range
- Enhancing competitiveness
- Improving quality
About Ordnance Factory Board (OFB):
- Ordnance Factory Board (OFB) consisting of the Indian Ordnance Factories is a Government agency under the control of department of defence production (DDP) Ministry of Defence (MoD), Government of India (GoI).
- OFB is a conglomerate of 41 Factories, 9 Training Institutes, 3 Regional Marketing Centres and 4 Regional Controller of Safety.
- It is headquartered at Kolkata.
- It is the world’s largest government-operated production organisation and the oldest organisation in India.
- It is often called the “Fourth Arm of Defence” and the “Force Behind the Armed Forces” of India.
- It is the 35th largest defence equipment manufacturer in the world, 2nd largest in Asia, and the largest in India.
- It is engaged in research, development, testing, production, marketing and logistics of the product range across air, land and sea systems.
- Under the ‘Make-In-India’ initiative, Ordnance Factories have made considerable progress with the development of the 155 mm 45 calibre ‘Dhanush’ and the upgrading of existing 130 mm M-46 artillery guns to 155 mm 45 calibre ‘Sharang’ gun systems.
- The first Indian ordnance factory can trace its origins back to the year 1712 when the Dutch Ostend Company established a Gun Powder Factory in Ichhapur.
- In 1787, another gunpowder factory was established at Ichapore; it began production in 1791, and the site was later used as a rifle factory, beginning in 1904.
- On 18th March 1801, the first Ordnance Factory, now known as the ‘Gun and Shell Factory’ at Cossipore was established under the aegis of its corporate headquarters Ordnance Factory Board (OFB) in Kolkata and production began on 18 March 1802.
- This is the oldest ordnance factory in India still in existence.
Now, OFB will be replaced by 7 new Defence PSU.
Note: Every year, 18 March is celebrated as the Ordnance Factory Day in India.