This does not mean privatization, it means further autonomy, accountability and responsibility to ensure top performance which is so necessary in modern day warfare!
‘Corporatization does not necessarily mean privatization. It was observed that the formation of corporation alone would ensure that the ordnance factories get the desired functional autonomy and make them accountable and responsible for their operations and performances’
(MoD (Ministry of defense official)
Modernization is the steering wheel on which the big countries are moving on. Turn on to Janes while browsing the internet and just look into the site with wide open eyes. For sure you will overawed by the progress the big countries are making on the land air and naval defense weapon systems, missiles, multi barrel rocket launchers, rifles and the big guns, main battle tanks, rifles all categories ranging from small to snipers, assault rifles, pistols, machine guns, you name it, aircrafts used in various combats in air ranging from fighters to bombers, to helicopters both attack, tank busters and cargo, heavy cargo carriers, naval vessels that include aircraft carriers, war ships, submarines, frigates, gun boats and one can keep going on and on. Why hunt for the high pedigreed defense technology from foreign nations when we can do it ourselves? Thus corporatization of ordnance factories became a necessity. The advantages go something like this:
The corporatization of Ordnance Factory Board (OFB) will improve the quality of its products and expand its market.
As part of the Atmanirbhar Bharat package, the central government had announced on May 16 last year that it would improve autonomy, accountability and efficiency in ordnance supplies by corporatization of the OFB (Ordnance Factory Board).
The OFB is a defense ministry entity and supplies critical arms and ammunition to the three armed forces and the paramilitary.
In May 2019, the Indian Army had sought immediate intervention of the defense ministry to check rising cases of accidents involving battle tanks, artillery and air defense guns due to poor quality of ammunition being supplied to it by the OFB.
The Army had then presented a report to the ministry listing incidents of accidents involving main guns of T-72 and T-90 and the Arjun main battle tanks, besides 105 mm field guns, 130 mm MA1 medium guns and 40 mm L-70 air defense guns, primarily due to faulty ammunition.
Corporatization is bound to increase efficiency, will reduce import dependency for arms and ammunition, enhance combat efficiency of the armed forces and ensuring customer satisfaction and greater penetration in defense export market. It is also a move towards optimal costs.
II. Indian Ordnance factory organization:
The Indian Ordnance Factories organization is a family of 41 Ordnance Factories under the aegis of its corporate headquarters Ordnance Factory Board, Kolkata and possesses the unique distinction of over 200 years experience in defense production. OFB is the world’s largest government-operated production organization, and the oldest organization in India. It has a total workforce of about 80,000. It is often called the Fourth Arm of Defense and the force behind the Armed Forces of India. OFB is the 35th largest defense equipment manufacturer in the world, 2nd largest in Asia, and the largest in India.
They are engaged in production, testing, logistics, research, development and marketing of a comprehensive product range in the area of land, sea and air systems.
Indian Ordnance Factory is the oldest and largest industrial setup which functions under the Department of Defense production of the Ministry of Defense. The ordnance factories form an integrated base for indigenous production of defense hardware and equipment, with the primary objective of self-reliance in equipping the armed forces with state of the art battlefield equipment.
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. It is engaged in research, development, production, testing, marketing and logistics of a product range in the areas of air, land and sea systems.
III. The history:
Everything has a history but this factory has a huge one. The history and development of Indian Ordnance Factories is directly linked with the British reign in India. East India company of England for their economic interest in India and to increase their political hold considered military hardware as a vital element. During 1775 British authorities accepted the establishment of the Board of Ordnance in Fort William, Kolkata. This marks the official beginning of the Army Ordnance in India. Thereafter many events took place. The evolution of Ordnance Factory goes something like this:
1801 – Establishment of Gun Carriage Agency at Cossipore, Kolkata.
1802 – Production started from 18th March 1802 at Cossipore.
1906 – The Administration of Indian Ordnance Factories came under a separate charge as ‘IG of Ordnance Factories’.
1933 – Charged as ‘Director of Ordnance Factories’.
1948 – Placed under direct control of the Ministry of Defense.
1962 – Dept. of Defense Production was set up at the Ministry of Defence.
1979 – Ordnance Factory Board came into existence from 2nd April.
Ordnance Factory Board predates all the other organizations like the Indian Army and the Indian Railways by over a century.
The first Indian ordnance factory can trace its origins back to the year 1712 when the Dutch Ostend Company established a Gunpowder 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. In 1801, Gun Carriage Agency (now known as Gun & Shell Factory, Cossipore) was established at Cossipore, Calcutta, and production began on 18 March 1802. This is the oldest ordnance factory in India still in existence.
IV. Great contributions made:
If it is the oldest then it is obvious that the set up has a formidable legacy of producing not only some outstanding weapon systems but also in other industrial establishments:
Building India with the advancement of technology and that ushered the Industrial Revolution in India starting with the first modern steel plant of India much before Tata Steel.
Setting up the first modern electric textile mill of India, first chemical industries such as smokeless propellant plants of India, established the first engineering colleges of India as its training schools.
They played a key role in the founding of research and industrial organizations like ISRO (Indian Space Research Organization) , DRDO( Defense Research and Development Organization) , BDL (Bharat Dynamics Limited), BEL (Bharat Electronics Limited), BEML (Bharat Earth Movers Limited) and SAIL (Steel Authority of India).
V. Current developments as of today:
Well the change over and scrapping of the Ordnance Factory Board was on cards and finally it was today regulated as the instructions came from the MoD. This is what happened:
The Union Cabinet has taken a decision to scrap the Ordnance Factory Board (OFB) which was first set up by the British in 1775.
Defense Minister Rajnath Singh has assured the employees that their service conditions will remain the same.
Now, all the employees of OFB (Group A, B & C) who belong to the various production units are going to be transferred to the corporate entities on deemed deputation. The deputation will initially be for two years and there will be no changes in their service conditions as central government employees.
According to officials, the OFB will be divided into seven different companies, in a specific manufacturing role.
All the 41 factories under the OFB will now be subsumed under one or the other of the seven new companies, all 100 per cent government owned public sector undertakings (PSU).
There will be the ‘Ammunition and Explosives Group’. The function of this entity will be to produce ammunition of various caliber and explosives. These will be both for the Indian market as well for exports.
The vehicles Group, according to officials, will be engaged in the manufacturing of the defense and combat vehicles which include mine protected vehicles, trawls, tanks and BMPs.
Weapons and equipment group for the production of small arms, medium and large caliber guns and other weapon systems. This will help in meeting the domestic demand as well as product diversification.
And the rest of the four companies are expected to be: ancillary group, opto-electronics group, troop comfort items group and parachute Group.
This decision of the restructuring by the Cabinet is aimed at turning the ordnance factories into assets which are profitable, which will help in improving the quality of the platforms and products and are cost effective.
The restructuring is expected to help in enhancing competitiveness and further deepening specialization in the product range.
The major customers of these OFs are the Indian Armed forces. Other customers include Paramilitary Forces; State Police Forces who procure their clothing, vehicles which are bulletproof and mine protected from the OFs. Also these forces procure their small arms and ammunition from OFB.
So everything is set as India pitches its ability on enhancing defense production with stress on quality. The big nations of the world opted for this a a long time back when international companies taking a foray into defense systems and they include, Lockheed Martin, Boeing, General Dynamics, Northrop Grumman, Raytheon Company, Aviation Industry Corporation of China, BAE Systems, China North Industries Group Corporation, L3Harris Technologies, United Technologies, China Aerospace Science and Industry Corporation, Airbus, Leonardo S.p.A and there are so many others. If we have to rub shoulders with such elite companies then we ought to modernize as fast as we can! This indeed is a splendid move!