Ordnance Factory Board dissolved

September 29, 2021

Defence Ministry has issued an order to dissolve the Ordnance Factory Board (OFB) in effect from October 1, 2021.

Highlights

After October 1, its assets, employees and management will be transferred to seven newly constituted Defence Public Sector Undertakings (DPSUs).
This order will abolish OFB, an establishment which was accepted by the British in 1775.

Background

Union Cabinet had approved a long pending reform plan of corporatizing the OFB on June 16. OFB has 41 factories and it was corporatized into seven fully government-owned corporate entities on the lines of DPSUs. Accordingly, the management, control, operations & maintenance of all the 41 production units and identified non-production units will be transferred to seven government companies from October. Those seven companies are: Munitions India Limited, Advanced Weapons and Equipment India Limited, Armored Vehicles Nigam Limited, Yantra India Limited, India Optel Limited, Troop Comforts Limited and Gliders India Limited.

Would it lead to unemployment?

As per government’s order, over 70,000 employees of OFB (Group A, B and C) belonging to the production units and identified non-production units will be transferred en masse to new DPSUs on terms of foreign service. They would be transferred without any deputation allowance in the initial phase, for a period of two years.
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.

Why OFB is being restructured?

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.

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