Cabinet approval for OFB corporatisation

Cabinet approval for OFB corporatisation

Subject : National organisations

Context : Addressing a long pending reform, the Union Cabinet on Wednesday approved a plan to corporatise the Ordnance Factory Board (OFB), which has 41 factories, into seven fully government owned corporate entities on the lines of Defence Public Sector Undertakings (DPSU).

Concept :

• Once implemented, the OFB, the establishment of which was accepted by the British in 1775, will cease to exist.
• This restructuring is aimed at transforming the ordnance factories into productive and profitable assets, deepening specialisation in the product range, enhancing competitiveness, improving quality and achieving cost efficiency.
• Corporatization refers to the restructuring or transformation of a state-owned asset or organization into a corporation. These organizations typically have a board of directors, management, and shareholders.

Ordinance Factory Board:

• It is an umbrella body for the ordnance factories and related institutions, and is currently a subordinate office of the Ministry of Defence (MoD).
• The first Indian ordnance factory was set up in the year 1712 by the Dutch Company as a GunPowder Factory, West Bengal.
• It is a conglomerate of 41 factories, 9 training Institutes, 3 regional marketing centres and 5 regional controllers of safety.
• Headquarters: Kolkata
• Significance: A major chunk of the weapon, ammunition and supplies for not just armed forces but also paramilitary and p744olice forces comes from the OFB-run factories.
• Production includes: Civilian and military-grade arms and ammunition, explosives, propellants and chemicals for missile systems, military vehicles, armoured vehicles, optical devices, parachutes, support equipment, troop clothing and general store items.