The cabinet chaired by Prime Minister Narendra Modi on Wednesday cleared the corporatization of the Ordnance Factory Board into 7 companies paving the way for them to more cost efficient, productive and profitable besides increasing competitiveness, a person familiar with the matter said.
The decision to corporatize the Ordnance Factory Board – which controls the 41 ordnance factories -- was announced last year by Finance Minister Nirmala Sitharaman as part of a package to make India self reliant in defence hardware production. The board will now be split into seven entities owned by the government that will produce ammunition and explosives, vehicles, weapons and equipment, troop comfort items, opto-electronics gear, parachutes and ancillary products, the person cited above said.
“This move would provide these companies with autonomy as well as help improve accountability and efficiency," the person cited above said.
An empowered group of ministers (EGoM), constituted under the defence minister Rajnath Singh last year, will oversee the board’s corporatisation and also take decisions on related matters, the person said.