Corporatisation of OFB: Defence workers’ federations seek withdrawal of terms of reference of EGoM

Written by Sushant Kulkarni
| Pune |

September 15, 2020 9:00:20 pm

The three main federations of the workers, who have been opposing corporatisation of the OFB and have called a strike against it on October 12.

The defence workers’ federations have sought withdrawal of the Terms of Reference (ToR) of the Empowered Group of Ministers (EGoM) – which was formed by the Centre for corporatisation of ordnance factories – and said they are ready to discuss transformation in the system but not with the “pre-decided notions” put forward by the Defence Ministry.

The Ministry of Defence had, on September 11, announced that the government has constituted an EgoM under the chairmanship of Defence Minister Rajnath Singh, “to oversee and guide the entire process, including transition support and redeployment plan of employees while safeguarding their wages and retirement benefits.” Other members of the EGoM are Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Minister for Law and Justice Ravi Shankar Prasad, Minister of State for Labour and Employment Santosh Kumar Gangwar, and Minister of State for Personnel, Public Grievance and Pension Dr Jitendra Singh.

MoD had said that the decision to form the EGoM was taken “Consequent to the decision of the government to convert Ordnance Factory Board (OFB), a subordinate office of Ministry of Defence (MoD), into one or more than one 100 per cent government-owned corporate entities.” A day earlier, MoD had said that it has selected a KPMG Advisory Services-led consortium as a consultant for the corporatisation of OFB.

The three main federations of the workers, who have been opposing corporatisation of the OFB and have called a strike against it on October 12, have responded to the announcement of formation of the EGoM. In a joint letter to Singh, they said, “We are of the firm view that the terms of reference should be broad enough to drive transformation, and not to implement an a priori solution, with unintended consequences not discussed and debated. In all our innumerable correspondence with DDP and your good self, we have categorically rejected the move of the government to corporatise the ordnance factories. However, as an alternative and viable solution, we have stated that we are open to change and transformation for betterment of the organisation, but not necessarily in the line of thinking put forth by MoD. We have proposed that the ordnance factories should be given full workload for the next five years, so that they will be able to achieve the targeted Rs 30,000 crore production value in the existing set-up itself. We have also proposed for appointment of an expert committee to achieve this goal.”

The office-bearers of the three federations — Bhartiya Pratiraksha Mazdoor Sangh (BPMS), an arm of RSS affiliate Bharatiya Mazdoor Sangh, federation of Left unions All India Defence Employees’ Federation (AIDEF) and the Indian National Defence Workers’ Federation (INDWF) of the Congress’s INTUC — on Tuesday attended a meeting called by the office of Chief Labour Commissioner of India in Delhi. The online meeting was also attended by MoD representatives, OFB officials, along with office-bearers of the federations. In the meeting, the proposed strike of ordnance workers and MoD’s stand on corporatisation were discussed. One more such meeting is slated to take place on October 9.


The joint letter further stated, “As chairman of the EGoM, we request you to kindly take up the matter with the Prime Minister with your recommendations that the above terms of reference may be withdrawn and instead, the EGoM may be empowered to discuss with the stakeholders and federations to implement the suggestions given by the federations for strengthening and further improving the functioning of the ordnance factories and transforming it into a solution provider for the armed forces in the existing government set-up itself.”

The terms of reference of the EgoM, as announced by the MoD, are: 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 their salary and pension of existing employees, and financial support that may be provided to the entity or entities to make them economically viable and self-reliant, among others.

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