New Delhi: The government on Monday said that steps have been taken to safeguard the interests of employees of the Ordnance Factory Board (OFB) after it is split into seven state-owned corporate entities.
In a major reform initiative, the government last month approved a long-pending proposal to restructure the OFB which operates 41 ammunition and military equipment production facilities across the country to improve its accountability, efficiency and competitiveness.
“The government has ensured safeguarding the interests of the employees of Ordnance Factory Board (OFB) post corporatisation of the OFB,” said Minister of State for Defence Ajay Bhatt while replying to a question in the Rajya Sabha.
The decision to corporatise the OFB on the lines of defence public sector undertakings was taken nearly two decades after the reform measure was first mooted to bring professionalism and significantly enhance its productivity.
Bhatt said all the employees of the OFB (Group A, B and C) who have been working in the production units and also the non-production units will be handed over to the new DPSUs.
“It has been decided that all the employees of OFB belonging to the production units and also the non-production units being handed over to the new DPSUs (to be formed) would be transferred to these DPSUs on terms of foreign service without any deputation allowance (deemed deputation) initially for a period of two years from the appointed date,” he said in a written reply.
Bhatt said all those employed at the OFB headquarters, OFB’s New Delhi office and OFB schools and hospitals would be transferred to the Directorate of Ordnance Factories which will be formed under the Department of Defence Production, initially for a period of two years from the appointed date.
“Till such time the employees remain on deemed deputation to the new entities, they shall continue to be subject to all rules and regulations as are applicable to the central government servants,” he said.
“Their pay scales, allowances, leave, medical facilities, career progression and other service conditions will also continue to be governed by the extant rules, regulations and orders, as are applicable to the central government employees,” he added.
Bhatt said the pension liabilities of the retirees and existing employees will continue to be borne by the government.
At present, the OFB functions under the Department of Defence Production of the Ministry of Defence.
The seven entities will include an ammunition and explosives group, vehicles group, weapons and equipment group, ‘troop comfort items group’, ancillary group, optoelectronics group and parachute group, officials said.
The ammunition and explosives group would be mainly engaged in the production of ammunition of various calibre and explosives, and its focus would be to exploit the huge potential to grow exponentially, including for the export market.
The vehicles group would mainly engage in the production of defence mobility and combat vehicles such as tanks, BMPs (infantry fighting vehicles) and mine protected vehicles.
The ordnance factories were set up as “captive centres” to serve the needs of the armed forces, but they have been facing performance-related issues for a long time.
In the last couple of years, the government has unveiled a series of reform measures and initiatives to make India a hub of defence manufacturing.
Last August, Defence Minister Rajnath Singh announced that India will stop the import of 101 weapons and military platforms like transport aircraft, light combat helicopters, conventional submarines, cruise missiles and sonar systems by 2024.
A second negative list, putting import restrictions on 108 military weapons and systems such as next-generation corvettes, airborne early warning systems, tank engines and radars, was issued recently.
In May last year, the government announced increasing the FDI limit from 49 per cent to 74 per cent under the automatic route in the defence sector.