OFB Strike: Prime Minister Narendra Modi’s bid to make India a self-reliant (Atma Nirbhar) in defence manufacturing faces a tough challenge as nearly 82,000 employees of state owned Ordnance Factory Board (OFB) have threatened an indefinite strike against the Modi government’s decision to corporatize 41 units of the OFB.
The development comes a day after the defence ministry’s decision to award a Rs 1,094 crore ($145.2) order to the OFB for manufacturing 156 upgraded BMP-2 Sarath Infantry Combat Vehicles (ICVs) for the Indian Army’s infantry units.
India’s Finance Minister Nirmala Sitharman last month announced the Modi government’s decision to corporatize 41 units of Ordnance Factory Board under Prime Minister Narendra Modi’s Rs 20 lakh crore self-reliant India scheme (Atma Nirbhar Bharat Abhiyan).
Nirmala Sitharaman also announced another major reform in defence sector as the Modi government decided to hike the ceiling on Foreign Direct Investment (FDI) in the defence sector under the automatic route from 49% to 74%.
However, the move to corporatize Ordnance Factory Board, where these 41 OFB units will be converted into the government controlled companies, has been vehemently opposed by the employee unions.
OFB Strike: Defence Employees call for indefinite strike
On Wednesday, federations of defence civilian employees took a collective decision to go ahead with an indefinite strike against the government decision, calling it: ‘arbitrary, illegal and unjustified’.
Three recognized federations—All India Defence Employees Federation, Indian National Defence Worker’s Federation and Bhartiya Pratiraksha Mazdoor Sangh – said the decision to corporatize OFB factories was against the past agreement between the federations and the ministry of defence.
“Four successive defence ministers of the country including George Fernandes, Pranab Mukherjee, AK Antony and Manohar Parrikar have given written commitments that the Ordnance factories would not be corporatized,” said C Srikumar, General Secretary of All India Defence Employees Federation (AIDEF).
“The present decision of the government is against all these assurances and agreements.”
He said that the date of commencement of indefinite strike will be taken soon after strike ballot throughout the country.
The three defence employee unions have last year deferred a strike following an assurance by the government that a high-level committee will be formed to achieve the target of Rs 30,000 crore defence production within the existing set up.
“Since there was a dispute between the employees’ federations and government with regard to the terms of reference represented to the defence minister in October 2019, government has arbitrarily made the announcements on corporatization of OFB by taking advantage of COVID-19 lockdown,” said the joint statement by the defence employees’ federations.
The federations also stated that the government decision has hurt the sentiments of 82,000 employees of ordnance factories who have been working relentlessly to manufacture all types of protective equipments, PPEs to supplement the country’s fight against the Covid-19 global pandemic.
“All these ordnance factories’ employees took risk of their life and were working throughout the Covid-19 lockdown. Instead of recognizing their service, a major decision [was taken]to convert this war industry as a PSU and thereafter to privatize the same,” the defence employee unions said in a joint statement.
Will OFB Corporatisation lead to privatization?
While announcing her decision on May 16, the finance minister Nirmala Sitharaman had clarified that corporatisation did not mean privatization of the OFB units.
Corporatisation simply means that OFB factories, which are under the ministry of defence, will be converted into the government owned public sector undertakings on the lines of the country’s sole aircraft manufacturer HAL and several others such as BEML, BEL, Midhani among others.
However, converting the OFB units that are directly under a government department – department of defence production – makes it easier for the government to divest stake or list them in stock market in the future.