Defence Ministry has issued an order to dissolve the Ordnance Factory Board (OFB) in effect from October 1, 2021.

• After October 1, its assets, employees and management will be transferred to seven newly constituted Defence Public Sector Undertakings (DPSUs).
• This order will abolish OFB, an establishment which was accepted by the British in 1775.

Union Cabinet had approved a long pending reform plan of corporatizing the OFB on June 16. OFB has 41 factories and it was corporatized into seven fully government-owned corporate entities on the lines of DPSUs. Accordingly, the management, control, operations & maintenance of all the 41 production units and identified non-production units will be transferred to seven government companies from October. Those seven companies are: Munitions India Limited, Advanced Weapons and Equipment India Limited, Armored Vehicles Nigam Limited, Yantra India Limited, India Optel Limited, Troop Comforts Limited and Gliders India Limited.

• As per government’s order, over 70,000 employees of OFB (Group A, B and C) belonging to the production units and identified non-production units will be transferred to new DPSUs on terms of foreign service. They would be transferred without any deputation allowance in the initial phase, for a period of two years.
• New DPSUs are required to frame rules and regulations related to service conditions of absorbed employees.
• A committee will be constituted to guide new DPSUs with respect to the absorption package.