Defence and Privatisation

Employees of ordnance factories threaten stir against corporatisation, unions to meet on June 20

Published : June 18, 2021 11:35 IST

At the ordnance factory in Medak, Telangana, a BMP armoured troop carrier gets the finishing touches. Photo: BY SPECIAL ARRANGEMENT

A number of trade union organisations have condemned the Narendra Modi government’s decision to corporatise the 41 ordnance factories that function under the Ordnance Factory Board (OFB). The Kolkata headquartered OFB is a constituent of the Defence Ministry’s Department of Defence Production. The unions have also threatened to go on strike and take legal action.

A number of trade union organisations, including the All India Defence Employees’ Federation, the Indian National Defence Workers’ Federation, the Bhartiya Pratiraksha Mazdoor Sangh and the Centre of Indian Trade Unions, have condemned the Narendra Modi government’s decision to corporatise the 41 ordnance factories that function under the Ordnance Factory Board (OFB). The Kolkata headquartered OFB is a constituent of the Defence Ministry’s Department of Defence Production. The unions have also threatened to go on strike and take legal action.

On June 16, the Union Cabinet approved a much-debated plan to corporatise, under the Companies Act, the OFB into seven fully government-owned corporate entities on the lines of Defence Public Sector Undertakings (DPSUs). The 41 factories will be divided into seven corporate entities broadly based on the type of manufacturing. Once the decision is implemented, the OFB, which the British set up in 1775, will cease to exist.

The Government argues that the move will give the companies the autonomy they need to improve accountability and efficiency, help transform them into productive and profitable assets, deepen specialisation of the product range, and increase competitiveness. Defence Minister Rajnath Singh said the “historic decision” would not alter in any manner the service conditions of the around 70,000 employees. The corporatisation plan of ordnance factories, which are engaged in production, testing, logistics, research, development, and marketing of a comprehensive product range of land, sea, and air systems, has been in the pipeline ever since the Modi government came to power in 2014.
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But the move has ignited strong protests from workers’ federations. According to them, the government’s “misguided ideological decision has completely destroyed the fundamental concepts of strategic management by vertical integration and war insurance/reserve due”. Pointing out that it was the ordnance factories that helped the country win “the Kargil conflict, the Indo Pakistan War, the Bangladesh Liberation War”, the unions averred that the government’s decision to corporatise and split the ordnance factories “will have a serious impact on national security and defence preparedness”.

Said C. Srikumar, general secretary, All India Defence Employees’ Federation: The breaking up of the OFB organisation into smaller entities will reduce the capacity of a unified conglomerate to produce everything under one roof. The entire workforce of the factories and the 400,000 defence civilian employees reject the decision of the government as it is against written agreements and assurances given by successive governments during the last 20 years. The present government, taking advantage of the COVID-19 pandemic and in the name of ‘COVID-19 Relief Package’, has announced its decision to corporatise and subsequently privatise the ordnance factories.”

The unions have also accused the government of working against the ordnance factories and its employees. Said Srikumar: “Last October, with the government adamant on corporatisation, we had issued notice for an indefinite strike. However, the Chief Labour Commissioner-Central (CLC-C) intervened, and a conciliation settlement was reached in his presence between the federations and the Defence Ministry. However, the Ministry started blatantly violating all agreements. The federations launched a complaint with the CLC-C in March. However, succumbing to pressure from the government, the CLC-C remained a silent spectator, ultimately concluding the proceedings by recording a failure report in June in the absence of the three major recognised workers’ federations. This enabled the Modi government to take its decision to corporatise.”
Also read: Creeping privatisation in Indian defence

According to Srikumar, a formal announcement of a call to strike will be taken after the three federations meet on June 20.

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