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Ordnance factories- what if it turns out to be an error of judgment?

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“We do not wish to see our faults, but take delight in perceiving the faults of others. Much unhappiness arises from this habit”- Mahatma Gandhi

The Modi Government seems adamant to dilute the labor laws, privatize the Public Sector and Corporatize the Government Sector. The idea behind all this is to keep the Capitalists happy and allow 74% direct FDI in Defence. The real story behind all this is to cover-up the Government’s failure to take care of the poor and needy as well as the migrant workers.

Unfortunately in India the Government and the bureaucracy never learn. The move to corporatize the Ordnance Factories, sells their shares in the Market, and privatize the Public Sector Units PSU’s are some recent examples. These decisions are taken to promote private interest at the cost of public Institutions. The underlying presumption is that all the Government Institutions are bad and their employees are even worse.

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The basic problem is that Government Institutions cannot showcase their inherent strength. This allows the interested parties to sing praises about the efficiency of the Private Sector and project the Government and Public Sector as incompetence and inefficient. We should not forget that in the unprecedented battle against COVID-19 Pandemic, Government Hospitals, Government Institutions, Municipalities, Gram Panchayats, Indian Railways, Air India and other Government Institutions have stood by Country. Nobody has bothered to appreciate their role, especially the Government.

Let us see what an organization like Ordnance Factory Board OFB has contributed towards production and supply of Military Hardware Equipment, Troop Comfort items, etc., during this crisis. The Defence Production Secretary himself has told in his interview to Indian Express recently.

“OFB and DPSUs have manufactured 15,09,000 masks of its 1,074,668 have been handed over. They have produced 1,27,350 Ltrs., of hand sanitizers and 1,08,935 ltrs, have been handed over. Similarly, 44,625 Coveralls manufactured by them 39,167 have been delivered. Beyond this OFB and DPSUs have manufactured 340 tents and 240 tents have been given out. They have manufactured 10,833-bed linens, handing over, 5,353 of them. They have produced and delivered 80 face shields and 400 blanket covers. OFB has repaired 67 Ventilators and handed over to the Telangana Government”.


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As the Finance Minister emphasized in her announcement, OFB is not going to be privatized. Objections from certain stakeholders can be resolved through mutual discussions. The Government is committed to safeguarding the wages and the retirement benefits of the employees of OFB”.

As is clear the Finance Minister and Defence Production Secretary are playing with words like Corporatization or Privatization. It is a known fact that Corporatization is the First step towards Privatization. Moreover, the Finance Minister herself has announced that the new Corporate entity will be listed in the share market and any common man of this country can purchase the share of the new Corporation. What does it amount to then?  It will be a grave error of Judgment if the 219 years old Indian Ordnance Factories are Corporatized. Let us analyze why it will be a grave error of Judgment.

Ordnance Factories cannot be run on a commercial basis since a “War Reserve” of skilled Manpower specially trained in Defence Production has to be kept at par with Armed Forces to maintain idle capacities to take care of surge demands in emergent War situations. It was this War reserve of the Ordnance Factories which helped to boost the production during all War times and the Kargil crisis period. This War reserve also helped the country during the “COVID-19” crisis by manufacturing PPE Items required for Frontline warriors in the fight against COVID-19 Virus.

No PSU or Private Sector will be able to maintain this reserve capacity. Another major problem is fluctuation in orders from the Armed Forces, orders of the products after a long gap, uneconomical order quantities, and life cycle support required for 30 – 40 years after the introduction of the equipment. This only a Government entity will be able to do. Defence Market is different from the conventional Market. Demands of the common people on the Market and the demands originated by the Armed Forces are different. The Defence hardware industry is unique since the only customer is mainly the Indian Army. The Indian Army takes years together to make the decision of upgrading the existing equipment or to decide about a new weapon, and the Industry has to patiently wait for the same. This patience of waiting is possible only in the Government Industry.

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The risk to National Security in case of growth of Private players in the event of possible failure of the proposed OFB Corporation resulting in Privatization, closure, etc. is that then the Private Players will dictate terms on the Armed Forces by fixing the price of their products to earn more and more profits. The Defence Industry in our country historically represents a genuine domain of the state, a domain based on Government orders, to what to produce, what resources to use, and what prices to charge, even whom to sell and to whom not to sell.

The present Government is committed to privatizing almost all the Public Sector undertakings. Even the DPSUs are not spared. The same

ofk_1490579865fate will be met by the OFB Corporation and ultimately a stage will come when the Defence Sector will be completely controlled by the Private Corporates. It will have a lot of implications in the political system of our country. It will lead to the rise of corporate cronyism, allowing unelected rich business tycoons to have an unwarranted say in the foreign policy of our country. Therefore the decision to corporatize the Ordnance Factories is not in the interest of National Security.

The High-Level Committees like Nair Committee, Kelkar Committee, and Raman Puri Committee which has recommended for Corporatization of Ordnance Factories have never considered all the above aspects. Even the so-called Defence Experts and the Retired Army officers who are writing Articles in favor of Corporatizing the Ordnance Factories have never bothered to analyze the serious impact on National Security and Defence preparedness of our country, in case of Corporatization of Ordnance Factories in this Country, we do not know who represents which lobby. The role of Report writers ends with writing a Report to suit whoever asked them to write the same. No worry for them about the impact of the implementation of their Report.

The situation of indigenous development would backfire with proposed corporatization of Ordnance Factories and Privatization of the PSUs, as these private Organizations will work more for profit than for any national mission, in the new Scheme of things and the pseudo academicians are more concerned for the private industry than the Soldiers. The voice of Solider is being lost in the entire process of indigenization, self-reliance, FDI increase, corporatization, and Privatization, etc. When the Border situation escalates, all these logics can evaporate with the ugly truth of policy decision having paralyzed the Country, as we have seen during the Kargil Crisis. Let us think for the Soldiers. Let us think of giving him the best. Let us have a technology development plan indigenously in the Ordnance Factories and DRDO. Let us not deprive of the giving the Soldiers the best to fight. Let Soldiers of the Country not a loser in the game of politics and foolish intellectual foresight of people of vested interest.

The Employees of Ordnance Factories and their Trade Unions have a genuine concern about their future in case the Ordnance Factories are corporatized. All these employees have been selected through a tough selection process especially Industrial Employees after their training as a Trade Apprentice in various Trades. The other employees are also selected through a scientific selection process. The Group-A Officers are selected through UPSC. Many of the employees and Officers have resigned their job from big Private Companies, Multinational Companies, and PSUs and joined Ordnance Factories not because the Job is a Central Government Job, but to fulfill their aspiration to serve for the Defence of our Country. The employees are in panic after seeing the pathetic situation of BSNL, wherein, the Government has forced more than 92 thousand employees to take voluntary retirement. Even wages for the Contract Workers are not paid for 6 months in BSNL. The Trade Unions of these Defence Civilian Employees have fought with the Government and have achieved many rights and benefits for them during the past more than 6 decades. How can they tolerate the injustice of converting them into employees of PSU and with no idea about their subsequent future? Therefore they have got all justification for fighting against the decision of the Government to convert the Ordnance Factories into a Corporation / PSU, especially when 4 former Defence Ministers have given written commitments to their Federations, that the Ordnance Factories would not be corporatized.

The patriotic citizens of the country must support the workforce of the Ordnance Factories who are fighting with all their strength to save the 219 years old Defence Industries of our country from Corporatization and Privatization.

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C Srikumar
C Srikumar
C. Srikumar is a senior Trade Union Leader. He was recently elected Deputy General Secretary of the World Federation of Trade Unions which represents the working class of more than 133 countries. He is also the General Secretary of the All India Defence Employees Federation which represents more than 4 lakh Defence Civilian Employees and the National Secretary of the All India Trade Union Congress (AITUC). The views expressed are his own


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