India Cannot Afford To Liquidate Ordnance Factories To Hide Successive Inefficiency Of Senior Officials Of MoD Say AIDEF, INDWF & BPMS

The Ordnance Factory Employees have been in war path against the decision taken by the Modi Government to Corporatise the 219 years old Indian Ordnance Factories consisting of 41 Defence Production Units. The Indefinite strike notice given jointly by the three recognized Federations of the Defence Civilian Employees, has been kept in abeyance after the conciliation settlement reached with the Chief Labour Commissioner on 09/10/2021. After the conciliation settlement series of meetings with the Federations is being held by the Secretary (Defence Production). Based on the request made by the Secretary (Defence Production), the Federations submitted an alternative proposal to the Secretary(DP) to continue the Ordnance Factories in the Government set up without Corporatisation. However in a meeting held on 05/01/2021, in the Department of Defence Production the Secretary(DP) even though appreciated the efforts taken by the Federations for preparing the alternative proposal, he expressed his inability to accept the alternative proposals given by the Federations.

Subsequently based on the understanding reached on 05/01/2021, the Federations submitted  their response/rejoinder/robust proposal on the presentation made by the DDP on the alternative proposal given by the Federations against Corporatisation of OFB.  They have submitted their proposal to the secretary(DP) on 12/02/2021. In the 18 page document submitted by the AIDEF, INDWF & BPMS, they have putforth their strong arguments for continuing the OFB in the Govt. Setup itself. has accessed a copy of the Joint Proposal forwarded by the Defence Employees Federations. Some of the salient features are given below for the benefit of our viewers.

Due to misalignment of objectives, OFB faces problems from Defence Accounts and QA agencies. OFB faces delay in decision making when cases are sent to MoD, mainly procurement and HR-related cases. There are rhyme and reason why such powers cannot be delegated to OFB. The principle of subsidiarity demands that decisions are taken at the level where it occurs, and there is no need for upward or downward movement of decision making. Any such attempt by the Department of Defence production to hold to the powers that can be best rightfully exercised by a manufacturer is a symptom of inertia, inflexibility and to some extent of rent-seeking.

The performance of any unit is linked to the efficiency of the ecosystem. Hence, two things should go together, reform of OFB along with reform of the ecosystem.MOD has a role to play in the performance or non-performance of OFB/DPSUs. The policymaker role of MOD in intertwined with regulator role. MoD’s long-distance management of DPSU/ OFB through their directives and imposition of the huge regulatory burden of reporting and compliance does not provide DPSU/ OFB level playing field with the other competitors. Let the residual powers remain with OFB. Let no file for other than policy matter go to MoD. Due to the lack of interest at the DDP Level many of the existing DPSUs are struggling for survival and many are already identified for privatization. Why the OFB should also face the same faith. In the past the Heavy Vehicle Factory Avadi was directly controlled by MoD. However since the MoD was not able to manage the show, the HVF was handed over to OFB and after that HVF has established itself as one of the most successfully performing Ordnance Factories. OFB should be given full responsibility for Quality, and Integrated Finance Function need to be worked out.

As Federations, we will try to protect the interest of employees, who are so far Government Employees. The decision about any reform is with the Government. It is up to them to make OFB flourish or kill the same. However the country cannot afford to liquidate the Ordnance Factories to hide the inefficiency on the part of the successive senior officials who are looking after the affairs of the OFB from MoD/DDP. It has now become clear after the announcement of the Hon’ble Finance Minister in her budget speech followed by the Ministry of Finance Notification dated 04/02/2021 that even in strategic sector like Defence, “bare minimum presence of the existing public sector commercial enterprises at Holding Company Level will be retained under Government control. The remaining enterprises in a strategic sector will be considered for  privatisation or merger or subsidiarisation with another PSE or for closure”. Therefore the writing is on the wall about the fate of OFB, in case if its converted in to Corporation/PSU.

Demands of the entire workforce of the OFB, which are non-negotiable, are as follows: 

1) OFB EMPLOYEES were selected through National Level Competitions and appointed to service as Central Government Employees/Defence Civilian Employees and has got every right to continue as Government Servants. Therefore their Service conditions cannot be altered to the disadvantage of OFB workforce and the same shall be in perpetuity. We have already stated in our proposal that any cadre is an excess including the JWMs, then they all can be transferred to Railways and other Ministries, so that their technical expertise can be utilized in other Government Departments. As already proposed by us, the need of the hour is to recruit more and more technicians from amongst the Trained Trade Apprentices of Ordnance Factories

2) Salary and Pension for all officers will continue to be drawn and disbursed from the Consolidated Fund of India

3) All category of employees should continue to get the protection under Article 309 and 311 of the Constitution of India as Public Servants

4) All category of employees should continue to get all the pay with all Pay Commission Benefits, perquisites, allowances, career progression as per RR and decision made by DOPT, the protection under Article 309 and 311 of the Constitution of India as Public Servants, any decision not altering their benefits negatively

5) Federations will support any changes within the existing structure done in good faith, and that demonstrates that OFB’s interests are not secondary to any private interest, and no changes will be made detrimental to the interest of employees. 

Finally we also accept the challenge that in case the MoD/DDP is not capable to improve the performance of OFB in the Govt. set up itself, the Federations if given an opportunity/free hand will prove that it is possible that in the Government set up itself OFB can function very effectively and perform to the expectation of the Armed Forces and the Nation in the next 5 years by meeting the production target of Rs.30,000 crores provided necessary budgetary support is given by the MoD/DDP.

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