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Employees’ Federations Submit Proposal for Restructuring Ordnance Factories

Defence Employees will participate in the November 26 strike call given by the central trade unions
Ordnance Factory

Defence civilian employees’ unions have made a joint proposal to the Ministry of Defence about restructuring ordnance factories. It is posed as an alternative to the government’s plans of corporatisation and to achieve the Rs 30,000 crore production target over the next five years within the government setup. 

The unions, which have been resisting the corporatisation of defence establishments, have said that they will extend their solidarity and participate in the November 26 strike call given by the central trade unions. 

R. Srinivasan, general secretary of the Indian National Defence Workers Federation (INDWF), said that the unions have identified various areas within the existing structure of the Ordnance Factory Board (OFB) which could be improved upon. He said that a restructuring exercise needs to be undertaken for improvement in quality and production, in the material procurement policy and with regard to manpower rationalisation.

INDWF, All India Defence Employees Federation and the Bhartiya Pratiraksha Mazdoor Sangh have been jointly resisting the government’s plans to corporatise the Ordnance Factories and have even served an indefinite strike notice last month. During their negotiations with the department of defence production, its secretary has asked the federations to provide specific suggestions for improving the performance of the OFB. 

Among the suggestions made in the restructuring proposal include the integration of the finance and accounts sections, proper utilisation of production entities, increase in budgetary allocations and providing functional autonomy to OFB, fixing accountability, abolition of certain establishments, thrust on development of new products and so on. 

If the proposal is implemented, the unions are confident that the OFB will achieve the Rs 30,000 crore production target within the next five years. 


OFB employs a variety of technical, supervisory and managerial manpower aside from support staff for other functions. According to the unions, while the defence ministry had approved a sanctioned strength of 1,45,015 workers and employees in 2016, the existing strength was only 80,001 workers 

“On an analysis it is revealed that with the direct industrial employees strength of 42,382 during the year 2016-2017, OFB has achieved value of issue of Rs.14,824.86 crore. At present, the strength of direct industrial employees is only 36,000 (Industrial Employees deployed on a Piecework system in the production) which implies that there will be a requirement of more direct industrial employees, for meeting the production targets (sic),” the proposal said. 

The unions pointed out that as many as 30,000 contract workers have been deployed in different factories and headquarters. They claim they are being misused by the contractors who do not even pay them the minimum wage. 

Further, the unions proposed that whenever the need for contractual workers arose, the management must either fill the vacant post in Group D category or should directly hire workers on a casual basis for 89 days. 

Integration of Finance and Accounts Function

The employees are proposing for the implementation of the Rajadhyaksha Committee recommendations which said that the finance functions be fully integrated with the organisation at all levels and simultaneously delinked from administrative or functional accountability to the rest of the MoD’s financial setup. 

Budget Allocation

According to the unions, the OFB budget allocation as a percentage of defence budget has been going down over the past six years.  The unions opine that an increase in budgetary allocation is essential for improving production capacity. 

The unions appealed for the recommendations of the Parliamentary Standing Committee on Defence for Ordnance Factories which stated that sufficient orders are to be assured from time to time to OFBs so that the manufacturing skills are retained and their capacity is fully utilised.

Functional Autonomy

“We propose that the OFB should be granted the functional autonomy as being done for Railway Board, ISRO and DAE etc., within the overall framework of government regulations. This will improve the efficiency of OFB. We also propose that reconstitution of OFB should be under an Act of Parliament,” the unions stated 

“Implementation of our proposal will result in enhanced employee performance which will ultimately make the OFB totally ‘Atmanirbhar’ within the government set up itself,” the unions concluded.

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