Prime Minister Narendra Modi will dedicate the seven new defense companies formed from the Ordnance Factory Board to the nation on Friday.
The government decided to transform the Ordnance Factory Board from a government department into seven private entities wholly owned by the government in order to improve autonomy in the preparation of the country’s defense.
The move aims to bring greater functional autonomy and efficiency and to unleash new potential for growth and innovation.
The seven new defense companies are: Munitions India Limited (MIL); Nigam Limited Armored Vehicles (AVANI); Advanced Weapons and Equipment India Limited (AWE India); Troop Comforts Limited (TCL); Yantra India Limited (YIL); India Optel Limited (TBEN); and Gliders India Limited (GIL).
In 2019, the government decided to transform the Ordnance Factory Board (OFB) into a company. Following the government’s decision to convert the OFB, the government had formed an Empowered Group of Ministers (EGoM) under the chairmanship of Defense Minister Rajnath Singh to oversee and guide the entire process, including supporting the transition and redeployment plan for employees while protecting their wages and retirement benefits.
Previously, the OFB controlled 41 factories, employing more than 70,000 people. He had an annual turnover of around Rs 19,000 crore. All of this is now spread across seven Public Sector Defense Units (DPSUs).
Employees belonging to Groups A, B and C of the OFB dissolved production units and non-production units have been transferred to the new DPSUs.
Four committees have been set up since 2000 to propose reforms in the defense sector, and with the exception of the one formed by former Defense Minister Manohar Parrikar, the other three – the TKS Nair committee (2000) , the Vijay Kelkar Committee (2005) and Vice-Admiral Raman Committee Puri (2015) – had promoted the corporatization of OFB.