[Jabardakhal Desk: The patriotic BJP government is flooding the defense sector of the country with it’s patriotic acts. The patriotic Defense Minister Rajnath Singh has been increasing the rate of foreign investment in the defense sector for a long time now, and to transform the ordnance factory completely into a privatised organisation, he is now hawking for it’s corporatisation. Based on the recommendations of the Defense Ministry, on behalf of the cabinet committee and the ministers of state in charge, corporatisation of 41 subdivisions of the ordnance factory along with another 15 relevant affiliate organizations was proposed. Right after this, multiple workers’ and employees’ unions of the ordnance factory voiced their opinion against this step towards privatization, namely: Confedaration of Defense Recognized Organizations (CDRA), All India Defense Employees’ Federation (AIDEF), Indian National Defense Workers’ Association (INDWA) and Bharatiya Pratiraksha Majdur Sangh(BPMS). The employees demanded reconsideration of this decision in a meeting held on the 14th of August while stating that this privatization would bring about a crisis in both the defense sector of the country and the economy. Although there have been numerous ongoing movements in every branch of the ordnance factory against the privatization of the organization, the Defense Division and the authorities of the ordnance factory zipped their lips on the issue which led to a nationwide strike by all the workers’ and employees’ unions starting from the 20th of August. Facing this stressful situation, the Defense Secretar, on 22nd August, stated that they will be forming a high level committee and will be willing to open dialogue with the unions. Finally, based on the authority’s stated confidence, they withdrew the strike. The committee was formed thereafter. On the 30th of September, a meeting was held which failed to reach an agreement. Although the government has not issued any written statement on this matter but ‘privatization’ has been mentioned in their press release! Since a written notice would mean that the privatization will be in effect, the employees demanded a written confirmation of non-privatisation of the organization from the government. Although the employees agree to modernization and restructuring of these orgnaizations in question, they object to the government’s statement in a press meet of forming a “proposed new entity” and carrying out the discussions on the demand of the workers based on that phrase. Letters sent to the Prime Minister against this privatization have also received no response yet. In the meeting, held on the 30th of September, the government wished to address and discuss the corporate structurization of the organization but faced strong opposition from the unions. The saffron government, in its elementary phase, was highly focused on bringing in foreign investment in the defense sector. Beneath the facade of strengthning the defense sector and manintaining autonomous character of the ordnance factory through increase of foreign investment and outright privatization, lies the tale of turning the organization into a non-exsistent entity. This is because agreement with foreign organizations in comparison to indigenous organizations serves the self-centered interests of the government and the position-holders of the division. The commissions earned by ordnance factories are based on nominations. Through privatization, it will be unlikely for them to receive such commissions as military officials are prone to provide these assignments to a foreign vendor to secure their safety and livelihood after retirement. Besides, these foreign vendors have tie-ups with indigenous private vendors like Reliance, Mahindra, L&T Defense, Bharat Forge Pvt. Ltd, Tata Advanced Systems and Tata Defense. Apart from this, lies the additional stress for “Research & Development”, which in reality is a concern of the DRDO, where the defense factories have no expertise on this issue. Another example of tincture of salt on wound is the enchanting lullaby of the Public-Private Partnership. The private orgnaizations would make use of the defense factory employees to extract surplus and profit by overcoming the limitations of their proportionally small employees section, while the defense factory will be left in the dark with no hope. An example of this process is the tie-up of the ordnance factory in Korba of Uttar Pradesh with Kalashnikov Concern’s as the ” Indo Russian Rifles Pvt. Ltd”. Under the extreme pressure of movements and protests, the Modi government has not been able to walk on the tracks of privatization even afyer listing it in their “100 day agenda”. However, the government officials have continued their threats. Currently, the unions are waiting for the government’s statement and will continue their protests post-Diwali. Under the current backdrop of war-mongering and fake patriotism of the saffron camp, this fight against privatization needs to be strengthened. A protester’s statement is noted below.]
The Ordnance Factories organization consists of 41 Ordnance Factories, 09 Training Institutes, 01 Recruitment Centre, 03 Regional Marketing Centre, 04 Regional Controllerate of Safety, 24 Schools, 25 Hospitals functioning under the aegis of its headquarters – Ordnance Factory Board, Kolkata. It is the oldest and largest industrial setup that functions under the Department of Defence Production of the Ministry of Defence. Through its long and rich history of existence, Ordnance Factories have served the nation as “the Fourth Pillar of Defence”.
The ordnance factories form an integrated base for indigenous production of defence hardware and equipment, with the primary objective of “self-reliance” in equipping the armed forces with state of the art battlefield equipments. Out of the 41 Ordnance Factories, 18 were set up during the colonial era, with the first of them being the Gun Shell Factory, Cossipore in 1801. To ensure “self-reliance” in defence production, further 23 Ordnance Factories had been set up post independence.
The 41 Ordnance Factories are geographically distributed all over the country at 24 different locations with state-wise distribution as under: –
Maharashtra – 10 Factories
Uttar Pradesh – 9 Factories
Madhya Pradesh – 6 Factories
Tamilnadu – 6 Factories
West Bengal – 4 Factories
Uttaranchal – 2 Factories
Telengana – 1 Factory
Odisha – 1 Factory
Chandigarh – 1 Factory
Bihar – 1 Factory
OFB is an integral part of Indian defence and is catering to the requirements of Indian Armed Forces (Army, Navy & Airforce), State Police, para-military and internal security forces with more than 1000 varied products, from weapons, arms & ammunitions to tanks, vehicles & troop comfort items. It is not a commercial organization with an objective to garner profit but a strategic partner to Indian Armed Forces playing a vital role in national security and defence. The products manufactured by OFB are not only safe in handling, reliable, but performs consistently during actual operation under varying and extreme climatic conditions.
OFB has performed its national responsibility at the time of National threat time and again. OFB has always operated behind the curtains and has silently provided full support to the Armed Forces. Thus OFB’s achievements have always been hidden from the eyes of the general public. There has been precedence where no private sector delivered supply of arms and ammunition at the time of Kargil War, whereas Ordnance Factories were standing alone with an Atlas like stature.
OFB has upgraded its processes and techniques continuously whenever the need of the hour arose. OFB’s newly developed 155 mm x 45 Calibre Gun “Dhanush”, which is one of the Major Products under “Make in India” theme, was chosen for display in Republic Day Parade 2017 at New Delhi. OFB launched “Nirbheek” – a robust and handy, self-defence weapon, which could easily be carried by women in their purses. India’s lightest bullet-proof jacket ‘Bhabha Kavach’ made by OFB was launched at the International Police Expo, 2019. OFB’s RDX based extruded double base propellant has been used in the indigenously developed 3rd generation Anti Tank Guided Missile (ATGM) “NAG”. OFB has developed 7.62 x 39 mm Assault Rifle “GHAATAK”, as an alternative to AK-47. Not only in the borders but OFB also contributes in space applications – like Propellants used in different stages of GSLV, special metals and alloys used to build satellites of ISRO along with precision instrumentation, optoelectronics and propellants for PSLV to ISRO. In the recent glorified achievement of ISRO’s Chandrayan – II, in which the entire nation and the Hon’ble Prime Minister himself has taken pride in, OFB has contributed by providing missile critical, special grade high energy material to ISRO.
According to Stockholm International Peace Research Institute (SIPRI) Fact Sheet December 2018, OFB is the largest arms producer from India (ranked 37th in the World in the year 2017), followed by HAL, BEL and BDL which appear in the top hundred arms producers. Moreover, as per the Standing Committee on Defence 2017-18, the OFB’s import content stands at only 8.9 to 15.5%. Whereas the import content of one of the DPSUs is 44 to 60%. With forward & backward integration, it can be stated that OFB is the Indigenous workhorse in the Defence Manufacturing Sector.
Profit making was not the main goal at the time of set up of the organization. And till date no government has assigned OFB to become a profitable organization. Today government desires OFB to become a profitable organization. But some aspects cannot be ignored. If the OFB products are supplied just for the sake of profit, it will create a situation where our products can be used against our armed forces by different routes.
The existence of OFB as a departmental unit is desirable since its operations are not commercially viable. The objectives of armed forces for armament is not the Most Cost Efficient Supply alone, but Supply of ‘State of Art’ Equipments and consumables depending on their needs, more so during War Times, Self-Reliance in a Technology Denial, Restricted Trade Regime of Imperfect Oligarchy market dictated by few western companies. When OFB prospers, the entire supply chain around it including MSMEs will prosper.
If talent is the key differentiator moving forward as per global competitiveness index, the biggest setback from corporatization will be talent, since as compared to DPSUs, ordnance factories are located in remote areas and the Government Tag is able to attract talent.
Indian Armed Forces will feel a pinch, as after corporatization, OFB will start operating on commercial principle and will not like to deliver uneconomic order quantities. Further, where budget remains an issue for Indian Armed Forces, price escalation of OFB products due to cost of capital profit elements and corporate taxation will hit them harder.
The Government of India should have taken a lesson from their past endeavour to close of HFC, Fertilizer Corporation of India (FCI) units like Durgapur, Barauni, Ramagundam, Telchar, Gorakhpur, Sindri in the year 2002. While taking the decision of closure, the technology as well as feedstock related issues in the context of production and the likely impact on the budget and availability of urea in the country were taken into account. The government instead went for importation. Later on the same factory had to be reopened in the year 2015 by the NDA Government by investing 27 thousand crores. Between this period of closure and restart, all the plants and machineries were wasted. Experienced workforce was lost.
Moreover, the defence market is different from conventional market. The nature of the demands of the defence market is categorically different from the conventional commercial market. Commercial principles cannot be applied to defence market by default. Even most of the PSUs are running in loss and is in the process of either privatization or closure. Even, DPSUs as a model is not the ideal destination as all the DPSUs are performing below par their capability.
So it is evident that PSU structure is not a viable idea for OFB. Instead of upholding its leap in the International scenario, the inevitable outcome of corporatization of OFB will be that OFB in due course will be handed over to some money making private players. By handing over this esteemed time tested organization, “the fourth pillar of defence” to some National/International private companies and by destroying one of the existing emerging Government establishment, having World ranked 37th, what purpose it will serve to the nation? Is this the proper implementation of “Make in India”? Or by reinforcing this time tested organization and by making desired changes while keeping it in the government setup and ensuring employment and safe future of the people and businesses dependent on it is the true spirit of “Make in India”?
[Name of the protestor withheld on his own request]
To hear from C. Srikumar’s voice, General Secretary of AIDEF, log on to: