Indian Ordnance Factory Board Corporatization Plan Gathers Pace

Indian Ordnance Factory Board (OFB), the collection of government owned factories which manufactures ammunition, weapons and vehicles, could be turned into one or more corporate entities.

The move is expected to ensure better accountability, higher production and profitability.

The Minister of State for Defence, Rao Inderjit Singh told the Indian Parliament  earlier this week, “The government has taken note of the recommendation of the Vijay Kelkar Committee that examined defense expenditure and suggested rationalization measures (including corporatization). Devolution of financial powers has made the OFB headquarters spend extensively on research and development measures.”

“The OFB is concentrating on coping with technology denial regimes, and thus core strengths of 12 ordnance factories have been identified. The OFB is also being encouraged to work with the Defense Research and Development Organization (DRDO) on major projects so that the ordnance factories can remain engaged from developmental stage to production,” Rao said.

Earlier in January, Defense Ministry sources were quoted by a national daily regarding the corporatization as follows.

The plan is to initially corporatize about 10 ordnance factories and turn them into Public Sector Undertakings (PSUs) to make them more accountable and increase their capabilities, sources in Defence Ministry were quoted as saying by the national daily.

The OFB is among India’s biggest defence equipment exporters and manufactures a range of equipment including ammunitions, Explosives, Propellants and Chemicals, Military, Armored and optical vehicles, Parachutes and other such equipment.