As a part of the Atmanirbhar Bharat, the aim is to make India a strong military power globally on its strength and grow a new indigenous defence industry, Prime Minister Narendra Modi said on Friday.
Formally initiating seven new Defence Public Sector Undertakings (DPSU), consolidated after the dissolution of the Ordnance Factory Board (OFB), on the event of Vijayadasami, he stated, “As India enters 75 years of Independence, we are completing projects that were stuck for a long time. The decision to revamp 41 Ordnance Factories, the launch of seven new companies, is a part of that journey. This decision was pending for the last 15-20 years. I am confident that these seven companies will become a major base of India’s military strength in the times to come.”
Today, there was more transparence, trust, and technology-driven strategy in the defence sector than ever before. Defence exports have grown by 325% in the last five years. “While competitive cost is our strength, quality and reliability should be our identity,” he asserted. On June 16, the Union Cabinet passed a long-awaited reformation to corporatise the OFB. From October 1, all its assets, employees, and management were shifted to the incorporated DPSUs.
The Ministry of Defence (MoD) has transformed all incomplete orders with the 41 factories of the OFB into considered contracts worth over ₹65,000 crores for the new companies. It has also concluded that 60% of the annual price of the indents would be paid by the Services to the new DPSUs as mobilisation advance against the targets of FY 2021-22, amounting to ₹7,100 crores.
The over 70,000 employees of the OFB (Group A, B & C) belonging to the production units and the distinguished non-production units have been transferred en masse to the new DPSUs on foreign service without any deputation allowance initially for two years.
Talking at the event, Defence Minister Rajnath Singh recognised that the infrastructure and skilled workforce of the OFB were vital and decisive assets of the country. Still, in the last few decades, “concerns have been raised regarding high costs, inconsistent quality and delay in supply of OFB products by the armed forces.”
“The new structure will help overcome these various shortcomings in the existing system of OFB and encourage these companies to become competitive and explore new opportunities in the market, including exports,” he noted.
The seven new companies are Munitions India Limited, Armoured Vehicles Nigam Limited, Advanced Weapons and Equipment India Limited, Troop Comforts Limited, Yantra India Limited, India Optel Limited, and Gliders India Limited.