Corporatisation of Ordnance Factory Board: PM dedicates 7 defence firms to the nation

Our Bureau New Delhi | Updated on October 15, 2021

Defence Minister Rajnath Singh with MoS for Defence Ajay Bhatt (right) and National Security Advisor Ajit Doval (centre) during the function organised to dedicate seven new defence companies to the nation, in New Delhi, on Friday   -  PTI

Says these companies will form the base of India’s military strength

Seven new defence companies, carved out of Ordnance Factory Board (OFB), were dedicated to the nation by Prime Minister Narendra Modi on Friday over video conference facility, as part of a major defence sector reform.

The new companies are Munitions India Ltd (MIL), Armoured Vehicles Nigam Ltd (AVANI), Advanced Weapons and Equipment India Ltd (AWE India), Troop Comforts Ltd (TCL), Yantra India Ltd (YIL) and India Optel Ltd (IOL). These companies have commenced business from October 1.

The Cabinet had on June 16 approved a long-pending proposal to restructure the over 200-year-old OFB that operated 41 ammunition and military equipment production facilities into seven State-owned corporate entities to improve its accountability, efficiency and competitiveness.

At a function organised by Ministry of Defence (MoD), the Prime Minister said the seven new companies would form a strong base for the military strength of the country in the times to come.

Modi also paid tributes to former President of India APJ Abdul Kalam, and said that Kalam dedicated his life to the cause of a strong nation adding that restructuring of ordnance factories and creation of seven companies will give strength to his dream of strong India.

Amrit kaal

The new defence companies are a part of the various resolutions which the nation is pursuing to build a new future during this Amrit Kaal of India’s independence, he added.

Noting the glorious past of Indian ordnance factories, the PM commented that upgradation of these companies was ignored in the post-independence period, leading to the country’s dependence on foreign suppliers for its needs. “These seven defence companies will play a major role in changing this situation,” he said.

Modi further mentioned that these new companies would play an important role in import substitution, in line with the vision of ‘Atmanirbhar Bharat’. An order book of more than ₹65,000 crore reflect the increasing confidence of the country in these companies, he added.

Raksha Mantri Rajnath Singh said that the new structure will help in overcoming various shortcomings in the existing system of OFB and provide these companies incentive to become competitive and explore new opportunities in the market including exports, while safeguarding the interests of the employees.

Objective of restructure

“The objective of this restructuring is to transform Ordnance Factories into productive, and profitable assets, improve expertise in product range, increase competitiveness, improve quality, enhance cost-efficiency and ensure self-reliance in defence preparedness,” he said.

Singh said that the country’s defence sector has scaled greater heights due to the reforms taken by the government in the past few years including creating a conducive ecosystem for exports and FDI.

The MoD has set a target of achieving a turnover of ₹1.75-lakh crore in aerospace and defence goods and services by 2024, including exports of ₹35,000 crore, he added.

Published on October 15, 2021

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