Dismantling of the Ordnance Factory Board (OFB)- Relevance for UPSC Exam
- GS Paper 3: Indian Economy- Changes in industrial policy and their effects on industrial growth.
Dismantling of the Ordnance Factory Board (OFB)- Context
- Recently, the Defence Ministry has issued an order for the dissolution of the Ordnance Factory Board (OFB).
- After dissolution, its assets, employees and management would be transferred to seven newly constituted Defence Public Sector Undertakings (DPSUs).
Dismantling of the Ordnance Factory Board (OFB)- Key Points
- Background: Ordnance Factory Board (OFB) was established in 1875 after it was accepted by the British in 1775.
- About: OFB was an umbrella body of the ordnance factories and related institutions.
- Parent Ministry: functioned as a subordinate office of the Ministry of Defence (MoD).
- Dismantling of OFB: On June 16, the Union Cabinet had approved a long-awaited reform plan to corporatise the OFB.
- It approved the conversion of 41 OFB factories, into seven fully government-owned corporate entities on the lines of DPSUs.
- Objectives of Restructuring: Key objectives are of OFB dismantling-
- Transforming the Ordnance Factories into productive and profitable assets,
- Deepen specialisation in the product range,
- Enhance competitiveness, improving quality and cost-efficiency.
Dismantling of the Ordnance Factory Board (OFB)- Associated Impact
- Transfer of the management, control, operations and maintenance of the 41 production units and identified non-production units to seven government companies. Seven companies are-
- 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.
- 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.
- Impact of employees: all the employees of OFB belonging to the production units and also the identified non-production units will be transferred en masse to the new DPSUs.
- Key Obligations of newly created DPSUs:
- They are required to frame rules and regulations related to the service conditions of the absorbed employees.
- 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.