The Central Government has issued an order dated 24^th September, 2021 to dissolve the Ordnance Factory Board (OFB) with effect from 1^st October, 2021. Accordingly the OFB with its inter-dependent and inter-connected network of 41 Ordnance Factories would be converted, for the time being into seven separate companies registered under Companies Act and would be duly listed in the Stock Market. This conversion of fully govt owned  departmental manufacturing entities integrated in Ordnance Factories Board under the Defence Ministry into seven separate corporate entities is meant for and is an indispensable technical necessity for opening the door for phased privatisation of these defence production units.    In the current neo-liberal pedagogy, the ‘corporatisation’ of Govt’s departmental manufacturing entities is nothing but a prelude to privatiastion.

The Ordnance Factory Board is the largest government owned conglomerate of 41 Indian Ordnance Factories under the control of Department of Defence Production, Ministry of Defence, Government of India. The Ordnance Factories have been catering to the needs of the Armed Forces for more than two centuries by providing them with indigenously produced arms, ammunitions and equipments and weapons.

Besides 41 ordnance factories – the defence production units, the OFB has nine training institutes, three regional marketing centres and four regional controllers of safety- called non-production units, which are spread over across the country. It is also engaged in research, development, production, testing, marketing and logistics of a product range in the areas of air, land and sea warfare systems. The majority of the R&D work being carried out by the Ordnance Factories, in collaboration with Defence Research and Development Organisation (DRDO) and other premier institutes such as the IITs. The OFB has entered into an agreement with IIT Madras to develop Centre of Excellence for Ammunition at the institute that will power the development of futuristic ammunition such as precision guided ammunition. The OFB has also signed a MoU with the Council of Scientific & Industrial Research (CSIR) for advanced research.

The Ordnance Factory Board’s history dates back to the establishment of Board of Ordnance at Fort William, Calcutta, in 1775, by the British East Indian Company. Then they started the Gun Powder Factory in Ishapore, (in North 24 Paraganas) in 1787. The Gun and Shell Factory, Cossipore, (Kashipur in North Kolkata) came into being in 1801. As 1801 is being considered official establishment of ordnance factory in India, its 219^th foundation Day of Ordnance Factories was observed last year, on 18th March, 2020. There were 18 Ordnance factories before Independence. Then with 41 factories, the OFB came into existence in its new avatar on 9^th Jan, 1979. It has a total workforce of about 81,500 employees. It is often called the “Fourth Arm of Defence” and the “Force Behind the Armed Forces” of India. Such a famed government establishment now stands dissolved since 1st Oct, 2021.

In fact, the roadmap for this anti-national operation was conceived immediately after Modi came to power in 2014 and numerous administrative attempts were made in that direction. But the defence sector trade union movement had been actively opposing every such move through consistent agitations including strikes. The latest strike action by defence sector workers against such retrograde move was for five days following which the Govt and the defence ministry in particular had to give an assurance to consider the demands of the joint platform of defence federations against the corporatisation move. But in blatant violation of such assurance to joint platform of defence employees’ federations, the BJP Govt moved ahead with its destructive project of privatisation of defence production sector.The concrete corporatisation scheme was rolled out with all precision when BJP got the absolute majority in Lok Sabha in 2019. Despite lockdown, during the peak of first wave of corona in May, 2020, Union Finance Minister had announced the corporatisation of Ordnance Factories along with the series of tranches of bonanza tolled out to the corporates to the tune of 20 trillion rupees. Immediately all defence sector trade union federations came together to resist and gave a call for strike against this anti-national move. Later that strike call was withdrawn in the wake of Indian troops stand-off with Chinese troops in Ladakh. Even thereafter, Modi regime relentlessly pursued to do away with OFB. Accordingly they promulgated the notorious Essential Defence Services Ordinance to ban any potential direct action by the defence employees. In the last monsoon session of Parliament they got the bill passed replacing that ordinance and notified within no time with sweeping power not only to ban the strike of defence civilian employees but to stretch the powers to ban any legitimate action of the workers in any area, if the central government considered, that is connected with even remotely with defence productions.

Accordingly the Order dated 24th September 2020 was issued by the Department of Defence Production. As per this order  the management, control, operations and maintenance of these 41 production units (ordnance factories) and some of the  non-production units will  be transferred to  seven Government companies (wholly owned by the Government of India). The newly created companies are namely-(i) Munitions India Limited, (ii) Armoured Vehicles Nigam Limited, (iii) Advanced Weapons and Equipment India Limited, (iv) Troop Comforts Limited, (v) Yantra India Limited, (vi) India Optel Limited, and (vii) Gliders India Limited (this is the “New DPSUs”). These will now become the more hazardous combination of defence-material-manufacturing entities registered as a company under companies Act, under Govt-ownership for the time being. The Order envisages that the service conditions of the workers of Ordinance Factories will remain unchanged up to two years after corporatisation. This clearly exposes the real game plan of privatisation of the corporatised entities within that period. Moreover the Central Government has also decided to transfer, the management, control, operations and maintenance of certain identified non-production units of OFB like Hospitals and Schools and 3152.11 acres of identified surplus land at 16 production units of OFB to the Directorate of Ordnance (Coordination & Services). At any point of time all these assets may be routed through the infamous Assets Monetization Pipeline to private corporates.

Besides the general dangers and the attendant vulnerability in dismantling of our government-owned defence production units and leaving out our Armed Forces to rely totally upon private players for defence requirements, the proposed structural changes are fraught with inevitable operational problems resulting in serious deficiency in an otherwise efficient production system under erstwhile OFB structure. The most important characteristics of the structure of Indian Ordnance factories in entirety are their mutual interdependency, backward integration in the production process of almost every item and the resultant system of mutually shared responsibility and accountability. This is going to be in total jeopardy and absolute mess owing to its dismantling into seven separate corporate entities, autonomous from each other.   

The OFB has created dedicated  facilities not only for production of finished stores required by the Armed Forces, but also integrated in-house facilities for supply of basic materials and sub-assemblies  in order to avoid dislocations in supply chain in terms of quantity, quality and scheduled time line for delivery .

Basic features of defence manufacturing in India also demand a reciprocally integrated and interdependent set-up. It is required for fulfilling its committed responsibility towards defence preparation of the country.

The action of splitting the OFB set-up which was having inter-dependent relation with each other and mutually shared responsibility in place, into seven separate and autonomous commercial entities, in every likelihood, will prove to be a big disaster.

This is not the view point of the trade unions alone. The official assessment by no less than an authority like OFB itself, on the very action of dismantling the fully integrated and mutually interdependent production system of the Ordnance Factories network and its separation into seven separate autonomous entities also could not deny the possibility such retrograde disastrous eventuality.  

To quote from the OFB document on the anticipated challenges in the event of breaking up of the integrated set-up of OFB, “it maintains a manufacturing set-up with strong backward integration. The backward integration is necessary in the view of complexities and peculiarities of defence technologies and the need to maintain defence manufacturing set-up at all times without commercial and profit considerations. And also, the peculiarities of defence market like wide demand fluctuations, uneconomical quantities etc. do not create a committed vendor/supply chain. Any attempt to break these backward integration linkages would weaken the indigenous defence manufacturing set-up which in turn can adversely affect the complete supply chain and the defence capabilities maintained by the OFBs”. (Emphasis added).

Despite this warning, the corporatisation-cum-disintegration of OFB along with 41production units has been envisaged without considering the entire complex supply chain of interdependence within ordnance factories system which is the lifeline to maintain the synergy as well as efficiency and time-line in the defence production. So the dissolution of OFB by Modi regime has been done to deliberately dislocate and disrupt this life-line of indigenous defence production network to pave the way exclusively for the benefits of private corporate masters, both domestic and foreign, of the present ruling dispensation. Nothing can be more heinous than such destructive move of the Govt, particularly on defence-sector supply preparedness.

Let us, for instance, examine the application of the concept of backward integration in the Heavy Vehicle Factory (HVF), Avadi, Chennai and how that has been done away in this new scheme. The HVF, Avadi is manufacturing MBT Arjun Tanks, Ajeya Tanks and Chassis for Bride layer Tanks and overhauling of Tanks. It sources all its supplies for manufacturing Tanks from Machine Tools Prototype Factory, Ambernath, Opto Electronic Factory, Dehradun, Engine Factory Avadi and Gun Carriage Factory, Jabalpur and other indigenous sources. That means in order to manufacture T-72 Tanks it has backward integration with these units. Following OFB corporatisation, a new manufacturing entity called Armoured Vehicles Nigam Limited has been incorporated in which the Gun Carriage Factory, Jabalpur has not been included despite having direct and unavoidable supply relationship with the main tank manufacturing unit. The Jabalpur factory is producing indispensable items/components for the tanks manufacturing – 105 mm LFG, 120 mm Mortar, Buffer & Cradle Assembly of MBT Arjun, Smoke Grenade Launcher for T-72 & MBT for Armoured  fighting wing, 81 mm Mortar, 51 mm Mortar,  Load body of B vehicles,  12 Bore PAG. Its separation or exclusion from the just corporatised Armoured Vehicles Nigam Limited and placement in another different corporate unit will destroy the interdependency relationship based on mutually shared responsibility and shared accountability in efficient and on-time manufacturing of MBT Arjun Tanks or Ajeya Tanks and other finished Armoured Tanks for the use of our Army. Who will suffer? The Indian Army; who will gain or benefit from this unscrupulous exercise? The foreign tank manufacturers, since Army’s requirement cannot wait for any reasons whatsoever.

Another more glaring example is the Ordnance Factory, Chanda which is manufacturing ammunitions for T-72 Tanks like heavy calibre gun ammunitions, mortar ammunitions, tank gun ammunitions, mines, rockets, war heads of missiles, fuses, detonators and primers. For manufacturing all these ammunitions the Ordnance factory, Chanda has got backward integration with Ordnance Factory, Kanpur, Ordnance Factory, Itarsi, Ordnance Factory – Bhandra, Ordnance Factory-Ambajhari, Ordnance Factory- Dum Dum, Cordite factory, Aravankad, and Gun and Shell Factory- Cossipore.   All these units supply all the materials for manufacturing variety of ammunitions to be propelled from T-72 Tanks in the Chanda factory. The OFB has created such interdependence among them.  It is not mere customer relation between them rather it is the shared responsibility between them which provides the synergy in the defence production. The Ordnance Factory Chanda was entrusted with the task of producing variety of ammunitions exclusively to be fired from Tanks. According to the Corporatisation planof OFB, that Ordnance Factory Chanda is now being merged with newly created Munition India Ltd along with only three units namely Cordite Factory Aruvankad, Ordnance Factory Bhandara, Ordnance Factory Itarsi and the rest viz., the Ordnance Factories of Kanpur, Ambajari, Dumdum and Cossipore have been separated  and merged with different other corporate entities despite having their indispensable interdependency with Ordnance Factory at Chanda for Amumition production and supply for the T-2 Tanks. Such mergers as well as separation exercise with altogether different corporate entities will destroy the basic aspects that are the lifeline of defence productions – that is–the interdependency relationship based on mutually shared responsibility and shared accountability in efficient and on-time manufacturing of both Tanks and the ammunitions to be fitted in the Tanks. The corporatisation project would derail and disrupt this shared responsibility and accountability. It is nothing but demolishing our government owned indigenous defence production. Finally, it will be the country’s defence forces that would stand to suffer. The ultimate beneficiaries will be the foreign armament companies along with their junior Indian partners in the private sector.

Another feature of backward integration is that each and every unit in the supply chains has again been interlinked to or interdependent to other defence establishments. For example Gun Carriage Factory, Jabalpur which is used to supply guns to Tanks. In that way it is linked to manufacturing ammunition meant for Tank ammunition manufacturing unit like the Ordnance Factory Chanda. But it has in turn got backward integration with other Ordnance factories for producing gun, say for example forgings of Barrel etc.  In this corporatization exercise, where these units have been merged with different entities, this crucial interdependence and shared responsibility would be cut-off which ultimately resulting in serious deficiency in production management owing to timely and effectively completing the production process where both the units would naturally be finished off losing its synergy its production.

These are a few examples as to how the dismantling of the Ordinance Factories network under OFB through so called corporatisation will result in inordinate suffering of our defence forces and adversely impact the country’s self reliance in the concerned fields. There are many more such examples. This retrograde dismantling and disintegration exercise will only make the country suffer severely besides imposing huge sufferings on its committed workforce.

Past experiences have clearly proved that country’s private corporates are not competent and efficient enough in the fields of defence related production work compared to the services and contributions of Ordnance Factories network along with existing functional Defence PSUs in almost all fields of defence forces’ requirements. Earlier also number of products have been attempted to by the successive governments in the centre to be assigned to some private corporate agencies. To quote from the CITU publication on Defence Sector Privatisation published in August 2017, “It is not that the procurement of some of the defence requirement items from the private sector was not given a trial earlier. The UPA government had decided to procure around 23 such items from the private sector during the early years of the current decade itself, despite vehement opposition from the defence employees’ organisations. But the experiment failed due to the failure of the private sector vendors to supply the items on time and meet the stringent quality requirements. They had to be brought back to the ordinance factories to meet the urgent requirements of our armed forces. It is pertinent to note the observation of the CAG in its report no. 36 of 2016 which says ‘In respect of the remaining 16 cases, procurement of spares were sanctioned by the Commandment, CAFVD and supply orders were placed on private vendors. All these supply orders were cancelled during September 2011 to February 2012 mainly due to the failure of the firms to supply the spares. Subsequently indents for supply of all the 23 items were placed on ordinance factories in March 2012’.”

Hence under neoliberal policy regime, the corporatisation of Ordnance Factories network, aimed at finally disintegrating the OFB network altogether is aimed at sabotaging the country’s defence production capability exclusively to the detriment of national interests and for the benefit of the private corporates, both foreign and domestic. The support to the corporatisation drive by some quarters, on the plea that the newly corporatised entities are in still in public sector, is absolutely wrong and disastrous and only deserves condemnation. Even the Essential Defence Service Ordnance specifically mentioned that the service conditions of the workmen of erstwhile Ordnance Factories will remain unchanged till two years after corporatisation. The message, about the longevity of the public sector status of the corporatised Ordnance Factories, is loud and clear.  Main game plan is finally handing over the defence production sector for private profiteering by armament MNCs. The BJP Govt’s overriding anxiety as well as commitment for the same has made it hastily promulgate Essential Defence Service Ordinance followed by its enactment to pre-empt and prohibit any resistance to such nefarious game plan.

About the job security and service/working conditions of the workmen, the stipulation in concerned Govt Order ( OM dated 24-9-2021, point no 3) is loud and clear. It is stated that “The Government has decided that all the employees of OFB ( Group A, B & C ) belonging to the production units and also identified non-production units ( as per the structure set out in Annexure A ) shall be transferred en masse to the new DPSUs  on terms of foreign service without any deputation allowance ( deemed deputation )  initially for a period of two years from the appointed date, in accordance with  Rule 37 A of the Central Civil Services Pension Rules 1972.”  Please note, it is only for two years that the service conditions will remain unaltered. Thus the workers en masse are destined to suffer, whatever rosy picture the Govt and those supporting the corporatisation are trying to paint. There is no scope for any illusion in that regard.

But the opposition to this retrograde corporatisation and disintegration exercise by the trade union movement and the defence sector employees’ federations are not merely for protecting their service conditions. It is mainly to stop the inevitable disaster such exercise will bring down to indigenous and efficient manufacturing capability on the defence related requirements of our armed forces and finally for the country’s security. In fact the trade union movement and the joint platform of Defence Employees Federations are fighting a patriotic struggle while agitating against this atrocious and destructive exercise of the Govt on dismantling and disintegrating the Ordnance Factories network.

By any stretch of imagination,the corporatisation, nay, the breaking-up of Ordnance Factory Board, is neither going to be even a wise commercial decisions nor it would transform the newly created entities into profitable and professionally competitive as the government has been falsely claiming through their loud noise in the media.  Rather it would become a bonanza for private corporate, both foreign and domestic to do their arms trade without any hindrance in the defence sector. It is nothing but a philistine articulation by those in governance to finally destroy the well developed indigenous manufacturing capability of the country in respect of defence-sector’s requirements and make the country much more dependent on foreign supplying agencies, even in most of the cases for after sales servicing and regular maintenance of defence equipments.

It is grave crime being committed on the nation. Despite all prohibitory hurdles on right to agitations, strikes etc imposed by the Essential Defence Service Act 2021, the defence production employees’ movement have not given a walkover, they have still been agitating while improvising innovatively their roadmap for struggle. The country’s working class movement are fully with their struggle. We have to expose such atrocious anti-national game plan of the Govt committed to place profiteering by their corporate masters, both domestic and foreign over the security of the country and national interests.

Crime on Nation will not pass. We shall fight for saving the Nation and we will definitely win.