Research Fellow, IDSA, Dr Laxman Behera’s article on the proposed corporatization of the Ordnance Factory Board (OFB), titled ‘Rebuilding ordnance factories’ has been published in Business Standard on August 30, 2019.
In a bold move, the government has floated a proposal to corporatise the Kolkata-headquartered Ordnance Factory Board (OFB), under which there are 41 factories with combined manpower strength of over 82,000, writes Dr Behera.
With the latest Union budget keeping the MoD interim allocation unchanged, the MoD has an uphill task in managing its resources and in funding its modernisation programmes.
Research Fellow, IDSA, Dr Laxman Behera’s article on defence allocation in the new budget, titled, ‘Economic Situation to Weigh Heavily on Resource Allocation Decisions’ has been published by NDTV Profit on June 18, 2019.
The difficult situations that the economy is presently going through will weigh heavily on Finance Minister Nirmala Sitharaman’s resource allocation decisions, writes Dr Behera.
Implementing the outlined 27 reform measures in four broad areas – Planning, Defence Budget, Acquisition and Make in India – would strengthen defence preparedness and build a credible defence industrial base.
India needs a comprehensive space security architecture consisting of a dedicated Space Command for operational aspects as well as an exclusive Defence Space Research Agency to focus on scientific and technical aspects.
That the AK-203 would be produced in India with 100 per cent indigenous content in less than three years makes it a win-win deal for the Army and the Make in India initiative, with Ordnance Factory Korwa emerging as the biggest winner.
The eight per cent hike in the interim defence budget 2019-20 is bound to further intensify the resource problem of the MoD, which is already battling a massive shortage of funds.
The Brief argues that MoD’s total allocations should be considered for any discussion on defence expenditure since the official defence expenditure does not capture all the expenses that the government incurs on national defence efforts.
While the provisions of the Countering America’s Adversaries through Sanctions Act (CAATSA) are unlikely to be imposed on India anytime soon, it is nonetheless likely to prove a dampener on an otherwise booming defence relationship between India and the United States.
In Favour of Corporatisation of Ordnance Factory Board
As a corporatised entity, the OFB will be in a far better position to respond to the market dynamics and face the competition effectively.