Corporatisation of the Ordnance Factory Board into 100% government-owned entities is a landmark event in the 245-year-old history of the board which received an annual budgetary support of over Rs 3,500 crore for its 76,000 permanent employees at 41 factories spread over 60,000 acres. OFB supplied products to the armed forces – a captive customer – on a nomination basis.
Because of this monopoly, there was no incentive for OFB to improve its quality of products and implement a dynamic system of getting customer feedback on both quality and delivery. Ordnance factories, meant to be the “fourth arm of defence”, lost their cutting edge and the trust of its customers over the years.
They have been facing performance issues for a long time with concerns having been raised in various quarters over the last few decades regarding the functioning of OFB, which, according to its critics, lacks professional capacities that is visible in the cut-throat private sector where the motto is ‘perform or perish’. There was no clause for penalties on faulty or delayed deliveries.
In the 2016 Uri incident, the killing of 16 soldiers killed by Pakistani backed terrorists invited punitive strikes by India.