Govt Sets up Empowered Group of Ministers Headed by Rajnath Singh to Oversee OFB's Corporatisation

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As part of the "Aatmanirbhar Bharat" (self-reliant India) initiative, the government had announced on May 16 that it would improve the autonomy, accountability and efficiency in ordnance supplies by converting the OFB.

The government has constituted an Empowered Group of Ministers (EGoM) under the chairmanship of Defence Minister Rajnath Singh to oversee the process of corporatisation of the Ordnance Factory Board (OFB), the defence ministry said on Friday. As part of the "Aatmanirbhar Bharat" (self-reliant India) initiative, the government had announced on May 16 that it would improve the autonomy, accountability and efficiency in ordnance supplies by converting the OFB, which is a subordinate office of the defence ministry, into one or more government-owned corporate entities.

On Friday, the ministry stated that the EGoM will "oversee and guide the entire process (of corporatisation), including transition support and redeployment plan of employees while safeguarding their wages and retirement benefits". Others in the EGoM are Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Law Minister Ravi Shankar Prasad and Labour Minister Santosh Kumar Gangwar, the statement said.

Minister of State for Personnel, Public Grievance and Pension Jitendra Singh is also part of the EGoM, the ministry noted. "The Terms of Reference (ToR) of the EGoM include: decision on conversion of OFB into a single defence public sector undertaking (DPSU) or as multiple DPSUs; matters related to various categories of employees, including protection of the salary and pension of the existing employees; financial support that may be provided to the entity/entities to make them economically viable and self-reliant," it stated.

Other issues included in the ToR are: "Grandfathering of orders already being executed by OFB or for which facilities created in OFB; treatment for land assets of OFB." The composition of the EGoM, along with the ToR, has been communicated to the OFB and various employee unions or associations at the "Board/Factory/Unit level" and they have been requested to place their suggestions, issues and concerns relating to the corporatisation of the OFB before the EGoM, the ministry said. It added that it has selected KPMG Advisory Services Private Limited and Khaitan and Company as consultants to the Department of Defence for the corporatisation of the OFB.

The OFB has 41 factories under it to produce ordnance for the country's armed forces.