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Modi Govt orders IMPORTANT STEP to restructure the Ordinance Factory Board; Why Left and Congress are against it?


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Modi Government is known for taking some strong and unpopular steps to make fundamental changes in existing processes, laws, and functioning of government organizations. The government has taken many steps to strengthen the Defence sector, it has taken some stern actions to stop the leakages in the system, to improve the indigenous efforts to develop arms and ammunitions.

Modi government has taken another massive step to dissolve the Ordnance Factory Board (OFB) and replace it with 7 Defence Public Sector Undertakings, which will oversee the 41 ordnance factories across the country. All these entities will be 100% owned by the Central Government. This transformation is likely to take place by the end of the year.

While talking to the reporters, Defence Minister Rajnath Singh assured that the interests of the over 70,000 OFB employees will be safeguarded, and service conditions of the employees will not be affected by this move.

What is Ordinance Factory Board (OFB)?

The OFB’s headquarter is based in Kolkata and it presides over a group of 41 factories that indulged in activities like defense research, development of armament, testing, logistic support, and marketing and sales of a wide range of defense products in the area of sea, land and air systems.

Ordnance Factories are the oldest and largest organization in India’s defense industry with a history that dates back to 1775 when The OFB was set up by the British at Kolkata’s Fort William.

Then in 1787, a gunpowder factory was established at Ishapore, followed by the setting up of a gun carriage factory in 1801 at Cossipore. As Kolkata was the capital of India during British Raj, all these factories were set up either in Kolkata or the nearby towns and cities.

At present, we have 11 ammunition and explosives factories, 10 weapons, vehicles, and equipment factories, and a total of 20 material and components, armored vehicles, and ordnance equipment factories, that come under the ambit of OFB.

Why OFB is an Achilles’ Heals for India?

Do you know, during the 2nd World War, it was OFB that was supplying most of the arms and ammunition to British and Friendly nations? But after that, this glorious organization was put on the downhill by the successive Indian Government, by ignoring the Defense preparedness and at the same time by creating the Left-leaning unions, which ensured the bad performance of OFB and associated factories.

We have zotted down couple of reasons, which are hurting India’s defense preparedness and our strategic security, all due to inability of OFB.

Cost Escalation – Although the OFB is a Government entity, but the cost of developing arms is way higher than the private players. OFB is supplying the Army’s Combat uniforms, which the Indian Army proposed to procure privately at one-third the cost and of better quality. Same story with other ammunition items, where the margin of OFB is as much as 2-5 times the items supplied by private players. Even CAG audit exposed the inefficiency of OFB and claimed that “The Cost of Overheads accounted for 36 percent of the cost of production. The high overheads are a consequence of the high committed cost on a workforce that is not directly deployed for production.

Bad Quality – OFB is a synonym of bad quality products, most of the projects despite having good designs have turned out to be very bad products when developed. A big example is 5.56 mm INSAS rifle, which was considered a fine product as far as design is concerned, but the final product was just a sham. We have seen similar issues with other products, like Guns, Hand grenades, and Tank shells, which were too bad in quality and thousands of Crores were wasted in procuring such sub-standard stuff.

Delaying Tactics of OFB – Another issue with OFB is its deliberate attempt to delay the defense procurement from private players or Foreign entities. Large numbers of foreign purchases of ’emergency required’ weapons and equipment have been scuttled by the OFB at the Acceptance of Necessity(AON) stage, as it always makes false claims that it can be manufactured by them, with low cost and less time. However, OFB never met the deadlines and our forces have waited for years for such equipment to be supplied.

OFB against Modernization – Due to OFB’s delay tactics, the modernization attempt of our successive governments were pushed back many a time. Due to the inefficiency of OFB and its management modernization process was pushed back by many years, and even the supply of optimal equipping has suffered big time. That was the reason why during recent operational contingencies like Uri, Balakot, or Galwan valley confrontation, the Indian Army has to initiate emergency procurements for items as simple as assault rifles and ammunition from foreign countries.

Pathetic Work Culture – As we said above, the OFB was entrapped by Left leaning unions right after the independence. It was the then PM Nehru and Defence Minister Menon, who orchestrated this transition due to their policies.

OFB loves to stage dharna and strikes, even during last year’s confrontation with China, our OFB factories were carrying out strikes and hindering the supply of arms and ammunition to our armed forces, standing eyes to eyes against the Chinese Army. Due to India’s democratic setup, we have witnessed the worst work culture in OFB, resource and financial slippages, wasteful expenditure, and corruption of OFB procurement.

OFB never meets targets – OFB wants all defense orders from the Government, but it never meets the targets. As per the CAG findings, out of 49 instances analyzed, OFB achieved production targets only in five instances during 2012-13 to 2016-17”. This tells the real story and exposes the inefficiency and unprofessionalism seeping into the OFB cadre.

OFB neven meets Army’s requirement – This is another reason for OFB’s failure, that it hardly put any efforts to meet the requirements of the Indian Armed Forces. For example, the Indian Army’s requirement of Combat Free Fall(CFF) parachute, developed by DRDO in 2006, was not fulfilled due to life-threatening defects observed by the Army, while conducting validation trials. It has been observed that even after paying 2-3 times, the OFB is developing sub-standard items, that can cause a lethal impact on our soldiers.

Why OFB Restructuring is required?

The OFB restructure was demanded by many successive committees and Governments, but it was the Modi Government that decided to take this crucial step to fulfill the following objectives.

  1. To supply high-quality arms, ammunition, military equipment, tanks, air-defense systems, and other weapon systems to the armed forces.
  2. To modernize all the production facilities to improve their production capacity and quality.
  3. To equip the Ordinance factories with technologies through transfer of technology (ToT) and in-house Research and Development.
  4. To meet the requirement of the primary customer (Indian Armed Forces) and ensure a high degree of customer satisfaction and expand the consumer base.
  5. To improve the work culture and to demolish the left-leaning union culture.

Why Left and Congress is against this OFB restructure?

After the announcement of OFB restructuring, all the three union federations in the 41 ordnance factories have announced their decision to go on indefinite strike against Centre’s decision to split the OFB into seven corporations. The federations will decide the course of the indefinite strike at a meeting scheduled with other like-minded organisations on June 27.

As expected, the Left parties and Congress are supporting this stance of OFB unions, and that’s the bone of contention from ages. As it was Left and Congress cartel, which kept OFB in such a shambles. CPI called this as an anti-national step, and Congress maintains almost the same stance. However, both the parties are unable to address the grave concerns related to the performance of OFB factories, which is impacting the defense preparedness of India.

Indeed, Left and Congress wants to keep their hold on Defense manufacturing apparatus and want them to remain backward, so that defense procurement orders could be given, and that is where they got the opportunity to make huge money, that was exactly their model to make money for last 7 decades.

However, but restructuring the OFB and putting more emphasis on ‘Aatmanirbhar Bharat’ and ‘Make In India’ campaigns and opening up the Defense Manufacturing for Private players, Modi government has shown its will to reduce the defense procurement from foreign countries, and that is what hurting the Left-Congress cabal a lot.

Well, as far as we understand this entire process, we believe this is a perfect and strong step in the right direction. Modi government has once again shown that it will never hinder from taking a strong and many be unpopular step to strengthen the Nation.


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