New Delhi. 03 August 2021. 41 factories across the country will be dissolved into seven new Defence Public Sector Undertakings (DPSU). The newly created entities will be 100% owned by the government.

These entities will be responsible for different verticals of the products such as the Ammunition and Explosives group will be engaged in production of ammunition while a Vehicles group will engage in production of defence mobility and combat vehicles.

One of the main apprehensions of the employees is that corporatisation (ownership and management lies with the government) would eventually lead to privatisation (transfer of ownership and management rights to the private player). The new corporate entities would not be able to survive the unique market environment of defence products that has very unstable demand and supply dynamics. Restructuring will result in greater autonomy and lesser government control over the corporation but there is a fear of job loss.

The Government has ensured safeguarding the interests of the employees of Ordnance Factory Board (OFB) post corporatization of OFB, inter-alia, in the following manner:-

  • It has been decide that all the employees of OFB (Group A, B & C), belonging to the production units and also the non-production units being handed over to the new Defence Public Sector Undertakings (to be formed) would be transferred to these DPSU(s) on terms of foreign service without any deputation allowance (deemed deputation) initially for a period of two years from the appointed date.
  • All the employees of OFB Head Quarter, OFB New Delhi Office, OF Schools and OF Hospitals, would be transferred to the Directorate of Ordnance Factories (to be formed) under the Department of Defence Production, initially for a period of two years from the appointed date.
  • Till such time the employees remain on deemed deputation to the new entities, they shall continue to be subject to all rules and regulations as are applicable to the Central Government servants. Their pay scales, allowances, leave, medical facilities, career progression and other service conditions will also continue to be governed by the extant rules, regulations and orders, as are applicable to the Central Government servants.The pension liabilities of the retirees and existing employees will continue to the borne by the Government.