CABINET GIVES APPROVAL TO OFB CORPORATISATION

NEW DELHI: The Union Cabinet, headed by Prime Minister Narendra Modi, on Wednesday cleared the corporatisation of India’s main producer of weapons and military equipment, the Ordnance Factory Board (OFB), to boost its efficiency and competitiveness in a longawaited reform in the country’s defence manufacturing sector, top officials familiar with the developments said.

The OFB, which controls 41 ordnance factories, will be split into seven government-owned entities that will produce ammunition and explosives, vehicles, weapons and equipment, troop comfort items, opto-electronics gear, parachutes and ancillary products, said one of the officials cited above, speaking on the condition of anonymity.

Ordnance factories are currently engaged in the production of tanks, armoured personnel carriers, mine-protected vehicles, bombs, rockets, artillery guns, anti-aircraft guns, parachutes, small arms, clothing and leather equipment for soldiers.

“The restructuring will transform the ordnance factories into productive and profitable assets, deepen product specialisation, boost performance and improve quality, cost efficiency and accountability,” said a second official. He said it was a big step towards achieving self-reliance in defence manufacturing.

The government expects the seven new professionally managed entities, likely to come up by the year-end, to increase their share in the domestic market through better capacity utilisation and also tap new export opportunities. “The new structure will help overcome various shortcomings in the existing OFB set-up by eliminating inefficient supply chains and provide these companies incentive to become competitive. It will boost their autonomy too,” said the first official. During the last two decades, various highlevel committees have underlined the need to improve the functioning of the OFB and turn its factories into vehicles of self-reliance for the country’s defence preparedness. Defence minister Rajnath Singh described the decision to corporatise the OFB as a “historic one.” “It is also a big decision from the point of view of national security,” Singh said.