The central government dissolves the Ordnance Factory Board; assets and employees transferred to seven government-owned Defense PSUs

The Defense Ministry quietly issued an order dissolving the giant Ordnance Factory Board (OFB) with effect from October 1, even as recognized unions of civilian defense employees protest an advertisement released by the Defense Production Ministry saying that Prime Minister Narendra Modi will dedicate to the nation the seven new defense entities that have been created from the 41 munitions factories. The OFB, an entity of the Ministry of Defense, supplied essential weapons and ammunition to the three armed forces and the paramilitaries.

In an order dated September 28, the Ministry of Defense declared: “The Indian government has decided to transfer, with effect from October 1, 2021, the management, control, operation and maintenance of these 41 units of production and units identified excluding seven government enterprises (wholly owned by the Indian government). The names of the seven Defense Public Sector Units (DPSUs) announced by the Ministry of Defense are: Munitions India Limited, Armored Vehicles Nigam Limited, Advanced Weapons and Equipment India Limited, Troop Comforts Limited, Yantra India Limited, India Optel Limited and Gliders India Limited.

The decree of the Ministry of Defense further stated: “The government has decided that all OFB employees (Group A, B & C) belonging to production units as well as identified non-production units… will be transferred to mass towards the new DPSU the conditions of service abroad without any delegation allowance (deemed deputation) initially for a period of two years from the date fixed (October 1).

Each of the new DPSUs will be required to develop rules and regulations relating to the terms of service of absorbed employees and should also seek an option of permanent absorption of employees deemed delegated to that respective DPSU within two years, the order declared. He also said that the service conditions of the absorbed employees will not be lower than the existing ones and that a committee will be formed by the Ministry of Defense Production to guide the new DPSUs in this regard “so that the absorption package given is attractive “.

The more than 220-year-old gargantuan ammunition factory organization of 41 ammunition factories will now see its assets, employees and management transferred to the seven new corporate entities wholly owned by the government. The decision of the Ministry of Defense is in line with the decision of the Union Cabinet of June 16 to split the OFB with the aim of transforming the entity into a corporation.

The Modi government defended its decision to split the OFB organization, which has an annual turnover of around Rs. 19,000 crore and around 76,000 employees, claiming that the corporatization of the OFB “would improve autonomy, responsibility and efficiency of ammunition supplies ”. The government first announced its intention to split the OFB in May last year.

The unions, including the Defense Employees Federation of India and the Bharatiya Pratiraksha Mazdoor Sangh, which represent 76,000 civil defense employees working in the 41 military equipment factories and the headquarters of the Ordnance Factory Board, called on their members to observe a “black day” in October. 1.


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