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Defence Ministry issues order for Ordnance Factory Board dissolution

The Ordnance Factory in Tiruchirapalli. File photo   | Photo Credit: The Hindu

The Defence Ministry has issued an order for the dissolution of the Ordnance Factory Board (OFB) with effect from October 1 upon which its assets, employees and management would be transferred to seven newly constituted Defence Public Sector Undertakings (DPSUs). This would mean the end of the OFB, the establishment of which was accepted by the British in 1775.

“Accordingly, on and with effect from the appointed date, OFB, which has been set up vide Ministry of Defence letter no. 1(82)/78/D(Fy.I) dated 09.01.1979, shall cease to exist as a body. Further, the Board position of Member (Finance), OFB shall also cease to exist on and with effect from the appointed date,” the official memorandum issued by the Department of Defence Production (DDP) dated September 24 said. These orders will come into effect from October 1, 2021 (appointed date), it stated.

On June 16, the Union Cabinet had approved a long awaited reform plan to corporatise the OFB, which has 41 factories, into seven fully government-owned corporate entities on the lines of DPSUs.

Accordingly, with effect from October 1, the management, control, operations and maintenance of these 41 production units and identified non-production units would be transferred to seven government companies — Munitions India Limited, Armoured Vehicles Nigam Limited, Advanced Weapons and Equipment India Limited, Troop Comforts Limited, Yantra India Limited, India Optel Limited, and Gliders India Limited.

This is in respect of production activities, viz production of arms, ammunitions, weapons, vehicles, defence equipment and non-defence equipment; and identified non-production activities, the order said. The government has also decided to transfer the management, control, operations and maintenance of certain identified non-production units of OFB and identified surplus land at 16 production units of OFB to the Directorate of Ordnance (Coordination & Services) under the DDP, it stated.

On the over 70,000 employees, the order said it had been decided that all the employees of OFB (Group A, B and C) belonging to the production units and also the identified non-production units shall be transferred en masse to the new DPSUs on terms of foreign service without any deputation allowance initially for a period of two years.

Each of the new DPSUs is required to frame rules and regulations related to service conditions of the absorbed employees and seek an option for permanent absorption from the employees on deemed deputation to that respective DPSU, within a period of two years. “A committee would be constituted by the DDP for guiding the new DPSUs in this regard so that the absorption package given is attractive,” it said.

Officials had stated that the restructuring is aimed at transforming the Ordnance Factories into productive and profitable assets, deepen specialisation in the product range, enhance competitiveness, improving quality and cost-efficiency.


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Printable version | Oct 20, 2021 4:09:04 AM | https://www.thehindu.com/news/national/defence-ministry-issues-order-for-ordnance-factory-board-dissolution/article36707478.ece

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