Ordnance factories remain a financial drain (English Version) Rakshak News 09 Jan 19
http://www.rakshaknews.com/vishesh/arms-factories-release-leakage-of-money
Ordnance factories remain a financial drain (English Version) Rakshak News 09 Jan 19
The nation has 41 ordnance factories operating under the Ordnance Factories Board (OFB) employing about 90,000 workers. The All India Defence Employees Federation represents 430 unions of all ordnance factories and has continuously held the government to ransom by threats of strike. The government has in the last few years cut orders for equipment manufactured by the OFB. The target for 2018-19, fixed initially at Rs 17,500 crore was reduced to Rs 10,000 crore. It also removed a total of 250 items from the product range of the OFBs.
At the same time the government is seeking to enhance ‘made in India’ by involving the private sector. It has already placed orders for ammunition worth 15,000 crore to the private sector angering ordnance factory unions. The closure of military farms, select static and base workshops as also depots has resulted in 31,000 civilian employees being declared surplus, irking the unions. Of course, they would be shifted to other organizations, till their retirement.
Supporting the employees of the ordnance factories is the Federation of Micro, Small and Medium Enterprises (MSMEs) vendors. They supply basic material to ordnance factories and have been equally affected by order cuts. The MSME has approximately 3 Lakh employees, which they claim could lose jobs. Their units had already placed orders for raw materials when the government slashed items from their product range.
There is a difference in perception between the armed forces, which is the sole consumer of OFB products and its unions. The unions are of the opinion that the government should invest in strengthening ordnance factories and help in capacity building, rather than seeking to reduce their output and making them redundant. They continue to propagate their importance to the army’s chain of supply. In many cases they claim that their products are of better quality than the market.
The armed forces on the other hand opine that the quality of products of ordnance factories are low and being government concerns with a fixed customer base, charges are exorbitant. Further, these factories served their purpose in the early years post-independence when the industrial base of the country was low. Presently with a strong industrial base, there are better quality products available in the market, with a wider option.
A clear example has been the recent decision to grant an annual clothing allowance enabling the soldier to select and purchase uniform material of his choice rather than be saddled with ordnance factory manufactured products, where even the colour of the shirt and trouser were at variance. It has brought satisfaction to the soldier while angering ordnance factories, whose production units now remain idle.
The government also announced in parliament, in response to a question that it has no plans to close ordnance factories. In Jan last year, the defence ministry announced that it would not make any further investments in ordnance factories and Defence Public Sector Undertakings (DPSUs). What it has ignored is that these would remain idle or their capacities would reduce, hence they would become white elephants sucking the defence budget and denying the armed forces funds for modernization, as the size of the pie remains fixed.
Simultaneously, the army is being forced to shed manpower by reducing its teeth to tail ratio, to enable generation of funds for modernization. The tail of the armed forces does not only end with the uniform category alone but extends to ordnance factories, whose production capacities are now being cut, while no action is being taken to close those which have outlived their purpose.
It is ironic that labour unions can hold the government to ransom while those which need to enhance force levels to counter emerging threats at the national level are compelled to cut manpower as they lack a voice which can force the government to listen. If governments continue to act in this manner, national security would become secondary to union pressures.
About the Author
Maj Gen Harsha Kakkar
Retired Major General Indian Army