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Union Cabinet approves restructuring of OFB into 7 new Corporate entities

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Government approves restructuring of OFBThe Union Cabinet approved a plan for the restructuring of the 246-year old Ordnance Factory Board (OFB) which has 41 factories, into 7 fully government owned corporate entities on the lines of Defence Public Sector Undertakings (DPSU).

  • The move to replace OFB with 7 corporate entities will enable the companies to have more autonomy and also improve their accountability and efficiency.
  • In the past, several recommendations were made by high-level committees to corporatise OFB to improve its efficiency and accountability.
  • The 7 entities will produce ammunition and explosives, vehicles, weapons and equipment, troop comfort items, opto-electronics gear, parachutes and ancillary products.
  • OFB is being restructured as part of India’s vision to achieve self-reliance in the defence sector.

Key Points

i.The restructuring will help in eliminating shortcomings such as inefficient supply chains and will help in exploring new opportunities in the market, including exports.

ii.In September 2020, an Empowered Group of Ministers (EGoM) under the chairmanship of Defence Minister Rajnath Singh was set up to decide on matters related to restructuring of OFB. It also comprises Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Law Minister Ravi Shankar Prasad and Labour Minister Santosh Kumar Gangwar.

iii.All employees of OFB (Group A, B and C) belonging to the production units would be transferred to the corporate entities on deemed deputation initially for a period of two years without altering their service conditions as central government employees.

iv.The defence ministry has set a goal of a turnover of USD 25 billion (Rs 1.75 lakh crore) in defence manufacturing in the next five years that includes an export target of USD 5 billion (Rs 35,000 crore) worth of military hardware.

Ordnance Factory Board

  • In 1775, British authorities accepted the establishment of the Board of Ordnance in Fort William, Kolkata.
  • OFB functions as a department under the Department of Defence Production, Ministry of Defence.

Recent Related News:

On September 11, 2020 Government of India constituted an Empowered Group of Ministers (EGoM) under the chairmanship of Union Minister for Defence, Rajnath Singh to oversee the Corporatisation of Ordnance Factory Board (OFB).

About Ordnance Factory Board (OFB)

Director General – C S Vishwakarma
Headquarters – Kolkata, West Bengal