“OFB Corporatisation” Approved by Cabinet

What is the News? The Union Government has approved a plan for Ordnance Factory Board(OFB) Corporatisation.

About Ordnance Factory Board(OFB):

  • Ordnance Factory Board(OFB) is an umbrella body of 41 Ordnance Factories.
  • Origin: In 1775, British authorities accepted the establishment of the Board of Ordnance in Fort William, Kolkata. This marked the official beginning of the Army Ordnance in India.
  • Nodal Ministry: It is currently a subordinate office of the Ministry of Defence (MoD).
  • Mandate: It provides a major chunk of the weapon, ammunition, and supplies for Indian armed forces, paramilitary forces, and police forces.
  • Headquarters: Kolkata, West Bengal
Corporatisation of OFB (Ordnance Factory Board):
  • Ordnance Factory Board(OFB) will be dissolved. It will be replaced by seven new Defense Public Sector Undertakings (DPSUs). Each undertaking will have a specific manufacturing role.
  • The 41 factories under the OFB will be subsumed under one or the other of the seven new companies. These all will be 100% government-owned public sector undertakings(PSU).
  • There would be no change in the service conditions of the OFB employees.
    • All OFB employees (Group A, B, and C) from different production units will be transferred to the corporate entities on deemed deputation for an initial period of two years.

Significance of Corporatization of OFBs: The restructuring of OFBs is aimed at achieving the following objectives:

  • Making it a productive and profitable asset;
  • deepen specialisation in the product range;
  • enhance competitiveness;
  • improve quality and cost-efficiency
  • overcome various shortcomings in the existing system and provide these companies opportunities in the market, including exports
  • Provide more autonomy, as well as improve accountability and efficiency.

Source: The Hindu

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