Government Decision To Corporatize OFB Will Cause Irreversible Damage

Can OFB be compared with Private Sector ? questions C.Srikumar, General Secretary of All India Defence Employees Federation

Posted : 19 March, 2021
Author : Admin
Government Decision To Corporatize OFB Will Cause Irreversible Damage

Our viewers are aware that www.indianpsu.com is closely watching the development of corporatization of OFB which consists of 41 Defence Production Units. On 18/03/2021 the OFB celebrated its 220th Year of existence. The 80,000 employees observed  “Save Ordnance Factories Day”, on the same day and the Unions  posted mail to the PM & RM appealing to think a thousand times before putting the rubber stamp on Corporatization of OFB. The Government is planning to break the OFB in to 6 or 7 entities which means 6 or 7 Corporations. This is revealed from a letter written by Punit Aggarwal, Joint Secretary/DDP to Zothan Khuna, the Principle Controller of Accounts for Ordnance Factories, asking the Accounts Authorities to quickly close the Accounts for the year 2020-21. Ordnance Factories are now a days compared with private sector. Can OFB be compared with Private Sector ? Will OFB will be able to improve its performance if it becomes a Corporation ? Will breaking the OFB in to 7 Corporation is it advisable ?. With these 3 questions we approached many Defence experts, Retd. Army and IOFS Officers and finally with the workers representative also. The consolidated opinon emerged from these discussion are given here. Let this be deliberated in public domain and let the Govt. also before issuing the notification on corporatization may consider these valuable views without ignoring them.

1) Can OFB be compared with Private Sector ?

Working system of Private Sector and a Govt sector is totally different systems. Anybody with basic knowledge of both the Private Sector and Govt. sector will not compare each other. The technical knowledge, mobility, multi-skilling etc., adoption of technical know how etc., nobody can match the workforce of the Ordnance Factories. None of the private Sectors in India can match it. Private Sector is having flexibility of taking financial and technical decision without any hindrances. The Management in the Private Sector are beyond the fear of CVC, CBI and CAG. They can very well follow certain practices for the smooth sailing of the Organisation which the Government Sector cannot. Another important area is the HR Area. Private Sector can hire experts for a short period. There is “Hire & Fire” in private sector which is not there in the OFB. In private industry there is no bureaucratic or political interference. 90% of the workforce in private Industries are outsourced and exploited lot. No worry about Labour Laws. In private Sector the R&D, marketing Sector are part of the system, whereas in OFB its wings are always clipped and then being asked to dance according to the tune of insensitive and arrogant bureaucrats. Therefore OFB cannot be compared with private sectors. 

2) Will OFB able to improve its performance if it is being corporatized ?

The major question which emerge is will Corporatized OFB will get the flexibility to take professional decisions without South Block interference. Will Govt. be able to give that flexibility of taking professional decisions without fear of being questioned by the three great Cs- CVC, CBI & CAG. Does any one of the Indian PSUs including Defence PSUs have this flexibility that too without fear from the three Cs. If not then what is the miracle which is going to take place after OFB Corporatization. Will corporatized OFB not be controlled by the IAS bureaucracy, Secretary(DP) and down below, who have no experience and expertise on Defence manufacturing, but who are even today controlling the OFB. They will continue to be the masters.  So what will change in Corporatized OFB. Nothing. Same old wine in new bottle. Why should successive Secretary(DP)’s who is the ultimate boss of OFB not held responsible for OFB’s failure.  Many DGOFs and Chairmans are also equally responsible for the present situation of OFB. They have not given the correct leadership for the Organisation. A few of them who had a vision and mission about the OFB were left with few months service only after their elevation to the highest post of OFB and they were not also to contribute much.  In any organization it is the head which matters most in the functioning.  Corporatization of OFB is an unwise decision and it will be a total mockery. 220 years old industry which stood the test of time cannot be ruined like this. A seasoned politician like Defence Minister Rajnath Singh should not become a party for such decision which is going to kill the very existence of 220 years old Defence Industry. 

3. Will breaking the OFB and estabilishing multiple corporations is it advisable ?

The Government is seriously thinking to convert OFB in to multiple Corporations.  This will be another suicidal decision, if taken. Ordnance Factory Board is an integrated Organisation in terms of its manufacturing process, business infrastructure, technologies and the plant & machineries. This facility was built over a period of time for strategic reasons. Geographicaly, these factories are located in more than 10 states and one Union territory. To quote an example HVF Avadi is manufacturing T-90 Tank. It depends on GCF, OFC &  FGK, for Ordnance, EFA  for Engines, MTPF for gearbox, OLF for sights, OF Medak for Engin castings. OF Muradnagar for specialized castings and tracks. MSF for forging of Ordnance. Moreover HVF depends on OF Chanda and OF Khamaria for Ammunition items. Total dependency of HVF items to other sister factories is almost 63%. Another eg. is with regard to Dhanush Gun. Dhanush Gun is being manufactured in GCF, Jabalpur, which depends on OFC and FGK for Ordnance, MTPF for wheel assembly and OFD for sight. MTPF supplies Electronic fuse of 155mm Ammunition required by the Ammunition division. Similarly all Factories are one or other way depending on other Ordnance Factories. If the OFB is broken in to pieces, then some of the strategic units which according to Govt. is not strategic, i.e. the 5 Factories which manufacture Troop comfort items, Body Armourer and Parachute etc., may not be able to financially sustain themselves for a certain duration.  It was these Factories which came to the rescue of the Govt., when the whole country was suffering without PPEs during the COVID-19 pandemic for the front line warriors. These capacities if sold out, then the Govt. and the people will be at the mercy of the Private Corporates. Let us think about another situation. If multiple Corporations are created, all the employees would like to join the entities which have better future. This will ultimately result in  IR problems and litigations. People who argues for multiple Corporations and privatization, comfortably forget the fact that even major private industries like L&T, TATA, Mahindra, Bharat Forge etc., they also have to depend on so many entities, which causes delay in their manufacturing process. Even to tap the export field, it is the high networth and turn over which is taken as the essential criteria for export and domestic orders. This can be achieved only if OFB remains as a single entity. 

With the above observations and comments which www.Indianpsu.com gathered, held a discussion with C.Srikumar, Genera Secretary of AIDEF who along with the other two Federations is spearheading the agitation against a Corporatization of OFB and asked his reaction on all the above observations of various experts. He was vociferous while making his view points. He stated that comparing a Defence Industry like Ordnance Factories with any private sector is just ridiculous and if anybody compares that means they don’t understand anything about the functioning of these two sectors. Ordnance Factories are not commercial organizations. They were not established to mint profit. They are at par with the Armed Forces, since their role is to manufacture equipments and weapons required to defend the country. The Govt. cannot change its role and start comparing with L&T and TATA. The experts who ever has given the opinion to www.indianpsu.com has tried to analyse about one of this decision taken by the present government. Who ever in the government has proposed for converting the OFB in to a Corporation, is totally ignorant and is having a myopic vision and biasness. The workers fail to understand how a govt. which speaks about “Atmanirbhar Bharat” has fallen in to the trap of such unprofessional and anti national proposal. The workers and their Trade Unions are not simply fighting to protect their service conditions. 

The Secretary(DP) was repeatedly asking the Federations only to discuss about their service protection. But the patriotic Federations took a very correct position, that their fight is not simply to protect their service condition, but to protect  a time tested industry which is required for the nation both during the war time and peace time. If government implement its decision to convert the OFB in to a single Corporation or a multiple corporation, it is going to cost an irreversible damage to the Defence Sector making total mockery of so acclaimed “Atmanirbhar Bharat”. Actually it is going to make India’s  “Atma” in Defence fully “Nirbhar” on foreign countries. The Nation should salute the spirit of OFB making innovations, meeting challenges across the time horizons.  

It is the indomitable will and preservence of the workforce who are making the OFB flag high & high. OFB is not an organization, which poses itself about its achievements. Many vested interested persons may abuse the Ordnance Factories to achieve their agenda. The Govt. also may blindly listen to such unwanted criticism, but the fact remains that the performance of Ordnance Factories speaks from within. The silence of the Organisation is stronger than the words and images which comes in the Newspapers.  I can only appeal  as a Trade Union worker  with 40 years of work experience in Ordnance Factories to the people of the country that they should join us in our struggle to destroy the evil intention of the vested interested persons, who wants to destroy the OFB organization and the country in one voice should tell the Govt. to take back its decision without taking it as a prestige issue. Prestige of the country is important than individual’s prestige.