As part of the Atmanirbhar Bharat package, the central government had announced on May 16 last year that it would improve autonomy, accountability and efficiency in ordnance supplies by corporatisation of the OFB.
The OFB is a defence ministry entity and supplies critical arms and ammunition to the three armed forces and the paramilitary.
The parliamentary committee said in its report that it concurred with the view of the defence ministry on the issue of OFB’s corporatisation and “believe that with necessitated structural improvements, OFB will be able to further improve quality of products and expand their market”.
The ministry informed the committee that it has appointed a consultant to suggest “organisational structural changes and business continuity plan” for the new entity or entities to continue on a sustainable basis.
“The study by the consultant is presently under progress. The committee recommend that the details be shared with them and at the same time would like to say that the ministry should weigh all the pros and cons in favour of the OFB before arriving at any finality on the findings of the consultants,” the committee stated.
The ministry last year held multiple meetings with various employee unions of the Ordnance Factory Board (OFB) to address their concerns regarding its corporatisation.
In May 2019, the Indian Army had sought immediate intervention of the defence ministry to check rising cases of accidents involving battle tanks, artillery and air defence guns due to “poor quality” of ammunition being supplied to it by the OFB.
The Army had then presented a report to the ministry listing incidents of accidents involving main guns of T-72 and T-90 and the Arjun main battle tanks, besides 105 mm field guns, 130 mm MA1 medium guns and 40 mm L-70 air defence guns, primarily due to faulty ammunition.