Central Government Approves Merger Of 41 Ordnance Factories Into Seven Corporate Companies

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New Delhi, 17th June 2021: The central government has decided to convert 41 ordnance factories into seven corporate companies. Thus, the existence of the Ordnance Factory Board (OFB) will also end. About 70,000 employees working in ordnance factories will be accommodated in seven new corporate companies. Initially, they will be sent to new companies on deputation for two years.

This decision was taken on Wednesday in the cabinet meeting chaired by Prime Minister Narendra Modi. The cabinet approved the recommendations of an Empowered Group of Ministers headed by Defence Minister, Rajnath Singh. According to officials, the seven corporate companies that will be formed will be completely run by the government and there will be no harm to the interests of the existing employees of ordnance factories.

According to government sources, one of the seven companies that will be formed will be from the Ammunition and Explosives group. All ordnance factories engaged in the same type of production will be merged into it. The second company will be of the vehicle group, in which factories manufacturing tanks, vehicles, etc. will be merged. The third group would be weapons and equipment. This will include factories manufacturing small, medium, and large-calibre weapons. The fourth company will make military equipment, which will be the Troop Comfort Item Group. The fifth group would be the Ancillary Group, the sixth would be the Auto Electronics Group and the seventh would be the Parachute Group. Thus, all the 41 factories will be converted into these seven companies according to their defence production material.

Will be able to enter a competitive role in the market: This move will increase the capacity, increase production and it will also be able to reduce the cost of the products. The factories will also get an opportunity to increase the production of new types and quality of weapons. Exports will also increase and they will be able to be in a competitive role in the market.

Experts will be deployed in the management: The management of the companies would work like corporate companies and experts from the market would be deployed in the management. Nothing has been said about investment in the formation of new companies, but according to government sources whatever is needed will be done. Soon, the Defence Ministry will appoint directors of all seven companies.

Rajnath Singh assured that there will be no change in the service status of the personnel of Ordnance Factories and they need not panic.

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