Dissolution of the Ordnance Factory Board (OFB)

Dissolution of the Ordnance Factory Board (OFB)

Part of: Prelims and GS-III – Defence and security

Context The Defence Ministry has issued an order for the dissolution of the Ordnance Factory Board (OFB) with effect from October 1 2021 upon which its assets, employees and management would be transferred to seven newly constituted defence public sector undertakings (DPSUs).

Key takeaways 

• Once implemented, the OFB will cease to exist.
• There will be no change in service conditions  of the employees.
• On June 16, the Union Cabinet had approved a long-awaited reform plan to corporatise the OFB, which has 41 factories, into seven fully government-owned corporate entities on the lines of DPSUs.
• Benefits 
  • Make the country self-sufficient in defence manufacturing
  • Transform the ordnance factories into productive and profitable assets,
  • Deepened specialisation in the product range
  • Enhanced competitiveness
  • Improved quality 
  • Help in overcoming various existing shortcomings    like eliminating inefficient supply chains

About Ordnance Factory Board

• Ordnance Factory Board (OFB), consisted of the Indian Ordnance Factories.
• It was an organisation, under the control of department of defence production (DDP), Ministry of Defence (MoD), Government of India. 
• It was engaged in research, development, production, testing, marketing and logistics of a product range in the areas of air, land and sea systems.
• OFB was the world’s largest government-operated production organisation, and the oldest organisation in India.