This may be characterised as a rant or a cry in the wilderness. But insiders are

privy to the fact that Policy making in Ministry of Defence, specifically in

Defence Production is nothing but a cacophony of the ignorant. Out of tune

with reality and run by “guests” from the States with no domain knowledge in

Defence. The Department itself has no institutional memory.


The Government makes endless noises about self reliancein Defence.

There is a great deal of criticism against the PSUs and Ordnance

Factory Board for slowing down the process of developing new & technologically

cutting edge weapon systems, which, arguably, the private sector is capable of.

Several retired Generals (ostensibly some of them consultants and some even

on the pay roll of private sector conglomerates) have let lose a tirade against the

OFB and PSUs for cornering orders on nomination basis and debilitating the

progress of Private sector in this all-important domain. Private participation in

Defence is touted as the magic pill for an end to the various ills that plague

Indian Defence production.


The Defence Procurement Procedure (for capital acquisition, now re-

named as the Defence Acquisition Procedure) and the Defence Procurement

Manual (for revenue procurement) lays down the procedure for various

procurement/acquisition programmes of the Government . By nature Defence

acquisition is opaque, since multiple factors. India is one of the rare countries

which have laid down a detailed procedure in public domain for the purpose.

Past scandals have led the Bureaucrats in MoD to be risk averse and adhere to

the laid down letter of law so that posterity shall not judge them harshly.

Eventually, the procedure places great emphasis on the process and not the final

outcome. Several past recommendations to streamline the entire process by

setting up a specialist organisation have not found support from the

Government. The word specialists / experts are anathema to the entrenched

bureaucracy since it would promptly drive the elite Generalist Bureaucracy out of



The induction of private sector into the Defence industry has, in theory,

taken place almost 20 years ago with liberal licensing processes. However, the

growth of private sector in the Defence technology has not been a success story

as it has been in software, automobiles and other areas, where Indian

companies compete with the best in the world. What ails the system? Is it the

existence of public sector behemoths that impede progress? How do they

prevent the growth of private sector?


The MoD and Defence Production in particular, is a specialist domain. But

the staffing pattern at the senior levels of bureaucracy almost entirely consists of

IAS Officers who have cut their teeth in municipal administration, revenue

collection, urban management, sanitation, law & order and what have you……

except Defence! There is no chance of exposure to Defence in the states.

Strangely enough, we think that the Elite of the bureaucracy are eminently

suited to run the Defence affairs of the country.


What is more….. before they develop any domain knowledge or institutional memory

to equip themselves to run the Defence Ministry better, they are promptly

transferred to unrelated fieldslike textiles, Rajbhasha, coal or other ministries;

or even better, sent to their home cadres where they get back to the subjects

they are more familiar with.


Except for the Navy, which has a system of gradually developing

indigenous capabilities in Defence production/acquisition, the other two services

lack in-house expertise on technological issues. They seem to turn their ire

against the PSU/OFB eco-system with very little knowledge of what is required

to develop indigenous capabilities. The third pillar consists of the R&D set up

which is another much castigated organisation. The products developed by them

have little acceptability in the Armed Forces. Incremental progress is not

something that services believe in. While we insist on high capability systems

from PSUs/ OFB/DRDO, such insistence doesn’t work with foreign suppliers.


We have to make do with what they have to offer. If a progressive approach is taken

to development of systems indigenously, build the supply chain and refurbish

industry with regular orders, we would be in a better situation today. The last

order for 124 Arjun tanks was delivered almost a decade back. The production

lines are idle while the Army has been contemplating repeat orders seeking

changed specifications. Meanwhile the supply chain, spare support etc have

dried up. This is an example of how things ought not to be done.


The curious case of OFB : One of the most criticised organisation is the

219 year old behemoth OFB. While other organisations are set up as PSUs with

limited autonomy, OFB continues to exist as a subordinate wing of the MoD. The

recent brouhaha over the corporatisation of OFB has its’ origins in some


committees which recommended it. But the very first Rajadhyaksha Committee

Report which recommended large level of autonomy (including Finance/quality

etc) was implemented in limited manner. The DGQA and IDAS continue to be

responsible for Quality and Finance/ Accounts. The OFB Organisation has played

an important role in the wars fought by the country. The workmen of OFB have

risen to the occasion to give record production during the Kargil war when the

Government found it difficult to order items for immediate supply. But in recent

years, the MoD has displayed nothing but callous disregard for the Ordnance

Factories organisation.


On the personnel front; the organisation has not been able to do regular

cadre reviews at various levels leading to a perception that it is the least sought

department from the employment point of view. Recruitment rules which are

urgently required to be notified after each pay commission re-structuring

remains unattended for as long as 20 years, leading to court cases and all round

disgruntlement. Investment proposals remain caught in red tape. Although large

degree of decentralisation of purchase decision making has been done in recent

years, the posting of Heads of Units (GMs of various factories) are still controlled

by the MoD. (A practice started in 2009 as a result of corruption allegations

against the head of the organisation-prior to that, all postings except that of

Members and Chairman of OFB were done by the OFB itself without reference to

the MoD).


If decisions cannot be taken on even non-technical subjects such as

personnel issues / employees related grievances pertaining to the OFB

organisation, can the MoD Officers take a call on myriad technology subjects

that characterise the Department of Defence Production? The last two years

have seen three Joint Secretaries who have held charge of Ordnance Factories,

not to mention two Additional Secretaries and three Secretaries who have

adorned the posts. With no continuity, can there be a long term plan for the

Organisation? Is it feasible for any Organisation to push through any papers

through such a rapidly changing bureaucracy, which comes with ZERO domain



Ultimately this band of Babus in revolving chairs has been given a

mandate to turn the Ordnance Factory Organisation into a PSU. What would

change if the department turns into a PSU. Firstly the Babus in MoD would have

converted OFB into another low hanging fruit like other PSUs. Attend Board

meetings once a month, be pampered by the PSU and have a cushy existence

without the rigour of every file, including individual disciplinary cases and

appeals, being processed by them. It gives them a sense of control, all power

and very little responsibility.


Presently, the OFB runs factories with multiple technologies. It has

created a group of Defence Technocrats and highly competitive workforce in the

Defence Sector. Sadly enough, in recent years, the oversight mechanism

consisting of MoD, Defence Accounts Department, Finance etc. seem to have

gained primacy in the running of the Department. It is nothing but a classic case

of the tail wagging the Dog. Would it become any better if turned into a PSU?

The answer is a resounding NO. There needs to be deep, structural reforms to

the MoD itself, failing which Atmanirbhar will remain a pipe dream. The Trade

Unions of the Ordnance Factory Employees have posed a challenge before the

Government that instead of ruining the “War Reserve” Ordnance Factories

through corporatization route, the Government should appoint an Expert

Committee to achieve the goal of Rs. 30,000 crore target in the next 5 years in

the Government setup itself and also to ensure that the Ordnance Factories

become a world class master for designing and producing modern Defence

Equipments required for the Armed Forces. The Government is not prepared to

listen to these suggestions since the suggestions are given by the Trade Unions

and not by the Private Corporates. Therefore, the MoD achieving “Atmanirbhar”

in Defence Production is a million dollar question.



The Author of this Article is General Secretary of All India Defence Employees

Federation (AIDEF) and the National Executive Committee Member of the

pioneer Central Trade Union AITUC

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