Burden of OFB: Liability at Armed Forces’ Cost

The clarion call given by the Prime Minister on 12th May for a “Self Reliant India” amidst the Covid 19 crisis and the announcement by Finance Minister Nirmala Sitharaman on 16 May that the Ordnance Factory Board (OFB) would be corporatized could be a welcome change. However, since she also mentioned that it did not mean privatization and the corporatized OFB will remain under government control, indirectly implying Ministry of Defence (MoD), leads to inferences that nothing is likely to change.

Ordnance Factories are the oldest and largest organization in India’s defence industry with a history that dates back to 1787. There are 41 Factories divided under five clusters or operating groups which are supposed to produce a range of arms, ammunition, weapons, armoured and infantry combat vehicles, and clothing items including parachutes for the defence services. They function under the Ordnance Factory Board (Board) which is under the administrative control of the Department of Defence Production of the MoD.

Multiple government-appointed committees in the past suggested corporatizing OFB to include: TKA Nair Committee recommended converting OFB to Ordnance Factory Corporation Limited in 2000; Vijay Kelkar Committee also recommended corporatization of OFB with ‘Navratna’ status, like BSNL in 2006; and finally, Vice Admiral Raman Puri Committee (2015) recommended corporatizing OFB and splitting it into 3-4 segments – each specializing in distinct areas like weapons, ammunition and combat vehicles. The reason for committee after committee coming up with these recommendations have been the inefficiency and poor quality with time delays in delivery of item that has been ordered.

However, no government or the MoD paid any heed to any of these recommendations despite the fact that huge resources were expended by these committees to come to these conclusions. So, why did we order these committees, if we were not to take any action on the same?

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bharat shakti
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