NEW DELHI: On Friday 15 October 2021, Prime Minister Narendra Modi handed over 7 new defence companies to the nation on the occasion of Vijayadashami. These new companies will be formed out of the already established the Ordnance Factory Board and this move will increase efficiency, autonomy in functions, innovation, and generate new potential growth in the country making it a self-reliant nation.
The Ordnance Factory Board, also known as the Directorate of Ordnance, is an organisation under the Department of Defence Production, Ministry of defence, Government of India. It had an annual turnover of Rs 19,000 crore and consists of 41 Indian Ordnance Factories, employing around 70,000 people and which the Government has decided to convert into 7 new 100 percent government-owned units.
This move will make India self-reliant in defence sector and the country will emerge as a defence hub in the coming future. Also, it is hoped that efficiency and innovations will make their way into the sector plus growth potential and functional autonomy will find their place as well. The employees of Groups A, B, and C of Ordnance Factory Board have been transferred to these new 7 Defence Public Sector Units (DPSUs).
In 2019 itself, it was decided by the government to go for the corporatisation of the Ordnance Factory Board. And consequently, an Empowered Group of Ministers (EGoM) was constituted under the chairmanship of Rajnath Singh, Defence Minister. This group aimed to see and act as a guide in the process which includes redeployment plans of employees and transition support thereby protecting their retirement benefits and wages as well.
The recommendations of four important committees were taken into consideration while opting for the decision related to reforms in the defence sector. These committees were set up starting from 2000 and three out of these, except the committee formed by Former Defence Minister Manohar Parrikar, favored for the corporatisation of the Ordnance Factory Board. The names of those three committees are TKS Nair Committee (2000), Vijay Kelkar Committee (2005), Vice Admiral Raman Puri Committee (2015).