Hari Mohan Will Have Challenges Ahead To Lead Ordnance Factory Board

He takes charge from Saurabh Kumar who superannuated from the services.

A Post Graduate Degree holder in Mechanical Engineering, Hari Mohan had been a topper of University of Allahabad and University of Pune while obtaining his Bachelor and Masters in Mechanical Engineering. He holds an M. Phil in Public Administration.

In a career spanning 39 years, Hari Mohan has contributed significantly in various positions in Bharat Heavy Electricals Limited (BHEL) Hardwar, Vehicle Factory Jabalpur, Engine Factory Avadi, Heavy Vehicle Factory Avadi, Ammunition Factory Khadki, Ordnance Factory Bolangir, Ordnance Factory Chanda, Ordnance Factory Dehu Road, OFB New Delhi Office and Ministry of Steel & Mines.

OFB manufactures from various products for the Indian army which includes tanks, armoured vehicles and assault rifles to howitzers, ammunition and even socks.

Challenges ahead

Ordnance Factory Board (OFB) handles 41 ordnance factories across the country which have more than one lakh workers. The company workers started recently one-month-long strike in the last August against the Ministry of Defence move to corporatise the board.

The Centre had arbitrarily decided to convert ordnance factories from a government department to a corporation or a PSU. According to the recent study, these factories of the Ordnance Factory Board based in Kolkata will manufacture Rs 30,000 crore worth of goods by 2024. Since these facilities are supplying sensitive products for national security trade unions are against the decision to corporatise the Board.

The OFB started off its journey from the Gun and Shell factory set up by the East India Company in Cossipore, near Kolkata, in 1801. Later, Government of India took charge of the company after independence announced the production of AK-203 rifles at the 41st ordnance factory in Korwa, Amethi.

According to defence analysts, the OFB gets budgetary support of over Rs 2,000 crore from the Ministry of Defence.

“We should understand the fact that OFB gets 80% of its orders from the Indian army and OFB’s 41 manufacturing units supports round 50% of the army’s requirements. This can be grown with strategic engagement with defence companies across the globe,” said an analyst.

There is also a growing worry among defence establishments on the OFB preparedness to manage the storage, handling and maintenance which are mainly responsible for growing defects and accidents. The analysts point out that ammunition accidents have started happening with tanks and mortars. Also, air defence equipment involving different depots, different units and different ranges, have been facing similar problems.

New initiatives

In a recent development, the OFB decided to manufacture weapons in a joint venture agreement with Indo-Russia Rifles Private Ltd. The JV mandates participation of the OFB, Kalashnikov Concern and Rosoboronexport. The inter governmental agreement (IGA) envisages the OFB to manufacture AK-203 assault rifles.

The contract states that Russian original equipment manufacturer UralVagonZavod and arms export agency Rosoboronexport will geta payment of $1.2 billion for technology transfer. At the same time, OFB will be paid $1.92 billion for local production of 464 T-90S tanks. Also,

The Indian Army started deploying the indigenously upgraded Dhanush artillery guns. As per Defence Ministry sources, Indian army will the first regiment in place by March 2020 and will get all 114 guns by 2022. Dhanush is the indigenously upgraded variant of the Swedish Bofors gun imported in the 1980s. Jabalpur-based The Gun Carriage Factory received the bulk production clearance (BPC) to manufacture 144 guns from the Army in February this year.

Defence manufacturing

Recently, the government decided to reclassify 275 products manufactured by the OFB factories as “non-core” items. This is viewed as the government’s decision to improve defence preparedness in the view of emerging geopolitical scenario, especially in the neighbourhood. This is likely to reduce Army’s purchases from OFB by almost half. In a recent report by MoD, the total value of production up to July 31, 2019 by the OFB was 20% which is 39% less than the target, while the value of issue (supply) to the army was only 15%, which is 55% less than the estimated target. The report states that there was a shortfall in 24 different types of ammunition and explosives and in 21 types of major principal items. While the US defence and aerospace industry, and to a lesser extent European industry, have begun shifting production to small, private manufacturers in India, the Russian defence industry has preferred to co-produce with large defence public sector undertakings (DPSUs) and ordnance factories (OFs), to meet indigenisation requirements in multi-billion-dollar contracts, such as the ones for building Sukhoi-30MKI fighters, and T-72M1 and T-90S tanks in India. As part of indigenisation, the Ministry of Defence has taken different measures including Defence Procurement Policy and FDI policy. Besides make procedures and offset guidelines, the MoD has come up with strategic partnership and defence manufacturing corridor. Defence Minister Rajnath Singh recently stated the government’s aim is to take the Indian economy to $10 trillion by 2030, and defence manufacturing sectors that will help contribute towards it, Defence Minister Rajnath Singh said. India’s defence industry base comprises nine giant Defence Public Sector Undertakings (DPSUs), 41 Ordnance Factories (OFs) and 50 dedicated R&D labs and other establishments under the umbrella of the Defence Research and Development Organisation (DRDO) and few under CSIR. Also, India has 70-odd licence-holding companies in the private sector and innumerable MSMEs According to Sweden-based think-tank Stockholm International Peace Research Institute in its March 2019 assessment, done for a five-year period (2014-2018), said India was the second-largest importer. During a period of five financial years starting in April 2014 and ending March 31, 2019, India has spent Rs 1,62,283 crore ($ 23.2 billion) on foreign purchases. The government in the past five years from 2014-15 to 2018-19 and current year till September 2019 had accorded Acceptance of Necessity (AoN) to 218 proposals, worth Rs 4,09,244 crore to promote domestic manufacturing. The OFB will have t invest massively on technology to further help Indian armed forces defence preparedness. Besides being accountable to manufacturing, OFB will have to understand the changing scenario in the defence manufacturing happening globally and prepare them for competition. Here comes the government’s efforts to export Rs 35,000 crore defence products by 2024.