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OFB employees pitch restructuring over corporatisation to hit Rs 30,000 crore target

OFB federations hope reforms can replace corporatisation and feared privatisation


As the tussle between the Ordnance Factories and the Centre continues over the issue of OFB corporatisation, the three worker federations representing 80,000 defence employees have submitted a detailed proposal to the ministry of defence suggesting numerous ways to improve their functioning and achieve the Rs. 30,000 crore production target within five years—without corporatisation.

According to official sources, a joint proposal was submitted before the ministry on November 20, in a meeting with the Secretary, Department of Defence Production. This demanded functional autonomy similar to what the Railway Board, ISRO, DAE and others enjoy, within the overall framework of government regulations. The Ordnance factories believe this will improve the efficiency of the OFB.

All India Defence Employees Federation (AIDEF), Indian National Defence Workers Federations (INDWF) and the RSS-affiliated Bhartiya Pratiraksha Mazdoor Sangh (BPMS) have opposed and rejected the decision of the government to corporatize the 219-year-old Indian Ordnance Factories, with federations and employees alike convinced that this move would not be in their interest, nor the interest of national security or defence preparedness. To them, such a move would be in “clear violation” of agreements and assurances given them by the government.

The Federation is apprehensive that the government move to corporatise OFB is a prelude to later privatisation.

The corporatisation of OFB—converting its factories into defence public section undertakings (DPSUs)—was first mooted by the T.K.A. Nair Committee in 2000.

While referring to the shortage of industrial employees, the ordnance factories have proposed to maintain a "rationalised manpower strength". The Federation says the current strength of OFB is 80,001 as against the sanctioned number of 1,45,015—as approved by the MoD. Almost 30,000 contract workers are deployed in different factories and headquarters formations. The majority of them, however, are deployed in permanent and perennial jobs, in violation of the Contract Labour Act.

OFB production has been stagnating at around Rs 12,000 crore over the last few years. This, despite the target set in 2015 by former defence minister Manohar Parrikar to achieve the Rs. 20,000 crore mark by 2018-2019.

On quality-related issues, the federation has stated that all the Ordnance Factories are ISO-certified and have NABL-accredited laboratories with all types of testing facilities. However, considering the Army's complaints about the quality of final products, the procedure for acceptance of the final products should be in line with the PDI system (pre-dispatch inspection) mode as is the case with exports. Performance over the entire lifetime of the product should be the criteria and OFB should work towards that direction to meet customer satisfaction. Instead of worrying about rules and procedures, the focus should be on the results.

The Ordnance factories federations have admitted that due to various reasons, the responsibilities and accountabilities of the managerial staff and officers had been eroded over time.

"This is a matter of serious concern and these needs to be corrected. This shortcoming was also pointed out by Rajadhyaksha Committee," they said, adding that risk-taking is not at all encouraged, new ideas and innovations should be encouraged—but the degree of responsibility and accountability needs to be strengthened. Existing financial and administrative powers available to the officers should be fully utilized and the delegation of powers should also be encouraged, they argue.

While recommending the abolition of certain establishment within OFB, the federation claims that, other than the OFB Headquarters at Kolkata and the OFB New Delhi Office, many establishments and institutions are functioning under OFB, adding to the overhead expenditure towards these non-production agencies and resulting in a serious impact on the cost of products. They propose that eight Ordnance Factories Institute of Learning(OFIL)—located at Avadi, Medak, Ambajhari, Ambernath, Kanpur, Ishapore, Jabalpur & Dehradun—be handed over to Skill Development Ministry, Human Resource Development Ministry or to the Department of Personnel and Training.

"For advance training facilities, OFB should have tie-up with reputed training Institutions and also by inviting professional faculty members for imparting training to the employees,” the federation says.

On the issue of research and development, the federation proposes that association of Army should be solicited in the development of any new products for them. Apart from DRDO, OFB may also involve the leading Indian Industries and various leading Technical/Academicals Institutes for developing the new products. OFB should be fully empowered for the same.

"There should be a monitoring cell consisting of Army, OFB and DRDO at least in four major centres like Avadi, Mumbai/ Pune, Kolkata & Kanpur. This monitoring cell will function as a watchdog with regard to the R&D activities and development of new products in the Ordnance Factories," the recommendation states, adding that the current budget allotted for R&D activities to the Ordnance Factories is very negligible. This percentage needs to be increased if R&D activities are to be strengthened. Besides, Ordnance Development Centres of OFB should have regular liaisoning with the concerned DRDO labs, the recommendations say.

It is also proposed that, as in the past, any new technology developed by DRDO at the first instance should be handed over to Ordnance Factories, especially those products which can be manufactured in the Ordnance Factories. Only those products that cannot be manufactured in the Ordnance Factories only be handed over to other agencies.

"Priority should always be given to the Ordnance Factories at the first instance for manufacturing any new products as assured by the Government in the past," the recommendations say.

The Federations also call for more thrust to be given to in-house R&D, placed under the Administrative Functional Control of OFB, while DRDO can continue to function in the area of Mission projects.

"This would ensure that accountability and authority would be coterminous and OFB would be held responsible for development of serial production. This should include continued value engineering, upgrading of products in the production line, investigation of defects and initiate corrective action and cost control measure in addition to the development of new and state of the art defence equipment and troop comfort items."


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