The Ordnance Factory Board (OFB) has abruptly cancelled several orders with Micro, Small and Medium Enterprises (MSME), said members of the Federation of MSME Vendors of defence and aerospace industries on Wednesday. They called for the intervention of the Defence Ministry to save the sector.
“By April, we get orders from OFB for the next financial year and we place orders for raw materials accordingly. But over the past two months we got letters from the OFB not to supply and the orders are cancelled for those already contracted,” Vinod Jolly, vice-president of the federation, told presspersons.
Mr. Jolly said this move would render “six lakh workers jobless.”
Neeraj Raizada, the federation's president, said the Master General Ordnance placed orders with the OFB for the entire year and this year the order value was cut down from ₹16,000 crore (in 2017-18) to ₹10,000 crore. This, he said, led to the cancellation of orders by OFB.
“We are really very surprised because we met Dr. Ajay Kumar, Secretary, Defence Production, in February and we were assured that the share of defence orders from the private sector, including the MSMEs, will rise by 5% every year,” he said.
Mr. Raizada said it was very surprising that the government, which claims to be pro-MSME, had taken such a decision and added, “On the other hand, this decision will wreak havoc on us.”
There are about 6,000 MSMEs that supply over six lakh products in the defence sector.
