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Corporatisation of Ordnance Factory Board
Why is it in news?
- The Government is set to form a high level committee to examine the aspects of corporatisation of the Ordnance Factory Board (OFB) and work out the modalities.
More in news
- Attempt at privatisation: Government rejected apprehensions from employees that there is an attempt at privatisation.
- “A high-level committee will study the issue and take a call on what needs to be done,” a senior source said. It will be a political call on how to go about.
- Ordnance Factory Board (OFB): The Kolkata-headquartered OFB with 41 factories spread across the country functions under the Department of Defence Production.
- Why is there attempt for corporatisation?:(1) OFB functions under the Department of Defence Production. Due to this every decision and action needs the approval of the Cabinet which results in delay and increase in cost of production.(2) It has no accountability and result orientation and the need is to move to a system of accountability on the lines of DPSUs.(3) For instance, in 2001 the OFB was to set up a plant at Nalanda in Bihar to manufacture bi-modular charges for the Army with initial investment of around ₹800 crore, which went up to ₹2,000 crore later. But the plant has not been set up till date.
- On the lines of DPSU:(1) The Defence Public Sector Undertakings (DPSU) do not have any hassles like OFB and it have been establishing joint ventures and partnerships for technology development and other things.(2) It has accountability and result orientation approach.
- Measures taken to address OFB problems:(1) In the last few years, several measures have been undertaken to augment capacity and increase production of the factories under the OFB. At least 20 cases of capital upgradation were cleared in last few years.(2) This is not for the first time, though, that corporatisation of ordnance factories is being considered.(3) There have been recommendations by various committees and several attempts over the last two decades but there has been no progress.
Source
The Hindu