By: Vivek Raghuvanshi
NEW DELHI — The Indian government is contemplating major changes in the state-owned Ordnance Factory Board, which administers 42 armament and ammunition factories across the country, but the workforce is opposing the move.
The government has already opened some noncore areas of weaponry to the private sector, including ammunition production, and now the plan is to identify some factories and tie up these with private-sector defense companies, thus breaking the monopoly of the Ordnance Factory Board, or OFB, a Ministry of Defence official said.
The move could eventually lead to privatization of the OFB at a later date, say analysts. However, the workforce, numbering 90,000 in these 42 factories, is opposing the move.
C Srikumar, general secretary of the All India Defence Employees Federation, told Defense New: "The government is trying to create a monopoly through private models. When price cannot be determined, it is better to have public monopoly as per market principles."
With a turnover of over $2 billion, the 42 factories under the OFB produce arms, ammunition, artillery guns, tanks, combat vehicles and troop comfort items. Nearly 80 percent of the production goes to the Indian Army, six percent each to the Indian Air Force and the Indian Navy and the remaining eight percent for paramilitary forces.
Besides opening up products to the private sector, the government is also identifying weapon factories of OFB that can be corporatized resulting in a tie up with private sector defense companies, MoD official said.
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