38th Report Of The Standing Committee of Defence Reveals That Future Of 7 Ordnance Factories Corporations Is Bleak : C. Srikumar

Government wanted to give a rosy picture to establish that OFB Corporatization was a successful, opines the senior trade union leader

The 38th Standing Committee report on Defence (2022-2023) is in Public Domain. The report says that “the restructuring of erstwhile OFB into newly created DPSU’s is aimed at transforming Ordnance Factories into productive and profitable assets, enhance competitiveness and improving efficiency. With more functional and financial autonomy, these new DPSU’s would explore newer markets both in the country as well as abroad.”

However, the same report reveals that the order book position for the newly created 7 DPSU’s carved out from the erstwhile OFB for the next 5 years is very bleak. All the 7 corporations put together the workload
position for the year 2023-24 is 16,694.58 Crores. In this, only the MIL and AVNL are in a comfortable zone, whereas the AWEIL with 8 factories is having a load of Rs. 1915 Crores, the TCL and YIL are in worst position. The TCL with 4 factories is having only workload of Rs.88.89 Crores and YIL with 8 factories are having workload of Rs.700 Crores. The MIL is not having any workload beyond 2025-26. The workload of AVNL is getting reduced to Rs. 560 Crores in 2027-28. While corporatizing the Ordnance factories the government claimed that the Ordnance Factories will have its order book worth of Rs. 30,000 Crores work. However, the Parliament Standing Committee Report reveals that it will be a daydream and this is what the Federations of the Defence Civilian Employees are repeatedly representing to the Defence Minister Rajnath Singh.

The Government has banned many items / equipments from importing. The Ministry of Defence have submitted before the Parliamentary Standing Committee that it has taken several policy initiative in the past few years and brought in reforms to encourage indigenous design and development and manufacturing of Defence Equipment, there by promoting self-reliance in Defence manufacturing and technology in the country. However, from the report itself it is revealed that neither export, R&D, innovation, etc are not happening in the 7 Corporations. Even today India ranks 1st in the World’s Top 10 arms importers. Global share of Arms imports of India is 11% and that of Pakistan is 3.7%. India’s name is missing from the World’s top 10 Arms Exporters. India’s Defence imports are not showing any declining trend. The value of expenditure of R&D by the new DPSU’s is very very

With the above trend and Army stopping placing indent to the Ordnance Factories and going to the private sector through open tender, the fate of the 7 Corporations are going to be in stake. Recently, the Army has floated an open tender for procurement of 12 Lakhs newly designed Army uniform and the 4 Ordnance Factories under TCL are not even allowed to participate even in the tender by imposing restrictive conditions. Another Corporation the GIL is also in deep trouble. The Army has decided to purchase 350 Nos. of Combat Free Fall Parachute System (CFF) ignoring the Ordnance Parachute Factory which is under the GIL. With these type of trends, how will the 7 Corporations survive.

As already reported by www.indianpsu.com – the 3 Major Employees Organizations of Ordnance Factories Employees viz., AIDEF, BPMS and CDRA have submitted a detailed note to the DDP in which they have directly charged that the Corporatization of Ordnance Factories is a failed experiment and said that the consultant KPMG’s recommendations have also failed. They have demanded that responsibilities should be fixed on those officials who have ill advised and misguided the political bosses to take the misadventures decision which is now damaging the Ordnance Factories.

www.indianpsu.com asked C Srikumar, General Secretary AIDEF for his reaction on the report of the standing committee of Defence. He replied that he is studying the report, but however it is seen from the report that the Government somehow wanted to give a rosy picture to establish that OFB Corporatization was a successful exercise. How many days the truth and the real picture can be hided from the people of the country. The report itself reveals the alarming situation about the order book for the next 5 years and also the meager expenditure on R&D, etc.

The tenure of the current Board of Directors and the CMD’s are coming to an end there is an uncertainty about the future of the 7 Corporations. The employees are suffering for no mistake of theirs. The best workforce of the Country are subjected to torture by some indifferent and insensitive persons who are nowhere in picture now. Good wisdom should prevail on the government to correct its mistake by withdrawing the decision of corporatizing the Ordnance Factories and restore the status of the Ordnance Factories as a Departmental Organization as Ordnance Factory Board and implement the valuable suggestions given by the Employees Organizations to achieve Rs. 30,000 Crores worth of production and to develop the Ordnance Factories as a World Class Defence production industry so that the nation can achieve full self-reliance in Defence. The Government should immediately start dialogue with the Federations in this regard. He further stated that the National Executive Committee of AIDEF is meeting on the 29 th & 30th of March 2023 and is expected to take important decisions for future Joint Action Programmes to save the Ordnance Factories and its employees.

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