Follow Us:
Tuesday, July 27, 2021

Explained: Why workers’ bodies from Left, RSS, Congress are fighting corporatisation of ordnance factories

How have these ideologically distinct outfits have come together? What is the process of corporatisation that they are fighting against? And, where does the process stand? We explain.

Written by Sushant Kulkarni , Edited by Explained Desk | Pune |
Updated: October 19, 2020 12:30:31 pm
Ordnance Factory Board, Defence workers unions, Defence union, Defence Union OFB, Express ExplainedOne of the main apprehensions of the employees is that corporatisation would eventually lead to privatisation.

The Centre’s move to corporatise the Ordnance Factory Board (OFB) has been strongly opposed by the federations of the workers from 41 ordnance factories and allied units across the country. The workers’ opposition to the BJP-led government’s new policy has formed an unlikely front of the federations affiliated to the Rashtriya Swayamsevak Sangh (RSS), the Left and the Congress.

How have these ideologically distinct outfits have come together? What is the process of corporatisation that they are fighting against? And, where does the process stand? We explain.

How have the three federations joined hands?

The three main federations of the recognised defence workers’ trade unions who have come together are — the All India Defence Employees’ Federation (AIDEF), which is federation of the Left unions, the Indian National Defence Workers’ Federation (INDWF) affiliated to Indian National Trade Union Congress (INTUC) of the Indian National Congress and the Bharatiya Pratiraksha Mazdoor Sangh (BPMS), which is the part of the Bharatiya Mazdoor Sangh (BMS) of the Rashtriya Swayamsevak Sangh (RSS).

The process of these three unions coming together is said to have begun around September 2017 when leaders of these unions had met in Kolkata at a meet called at the OFB headquarters. In the following months, these federations, which together represent close to 85 per cent of the 82,000 workforce from 41 ordnance factories and its allied units, started coming on the same platform for various issues including some policies of the government about defence production, National Pension Scheme implementation and compassionate appointments.

Leaders from the three federations said prior to the 2019 General Elections they together approached all main political parties seeking support on various issues of workers and those related to Defence production industry. With no concrete support from any of the political parties, they decided to keep putting up a united fight for the issues faced by them. The federations have since been united in agitations, negotiations and representations to the Ministry of Defence. The three federations had gone on a nationwide strike against corporatisation last September. This year, the strike was scheduled from Monday but was deferred pending conciliation talks with the MoD.

Currently, such united front from central trade unions across the ideological spectrum is also seen in the opposition to the government’s decision to open coal sector to private players.

📣 Express Explained is now on Telegram. Click here to join our channel (@ieexplained) and stay updated with the latest

What does corporatisation of the OFB entail?

The OFB, an umbrella body for the ordnance factories and related institutions, is currently a subordinate office of the MoD. The organisation dates back over 200 years and is headquartered in Kolkata. It is a conglomerate of 41 factories, nine training Institutes, three regional marketing centres and five regional controllers of safety.

A major chunk of the weapon, ammunition and supplies for not just armed forces but also paramilitary and police forces comes from the OFB-run factories now. Their products include civilian and military-grade arms and ammunition, explosives, propellants and chemicals for missiles systems, military vehicles, armoured vehicles, optical devices, parachutes, support equipment, troop clothing and general store items.

The corporatisation will result in the conversion of the OFB into one or more 100 per cent government-owned entities under the Companies Act, 2013 like other public sector undertakings.

While at least three committees on Defence reforms set by the governments between 2000 and 2015 have recommended the corporatisation, it had not been implemented till now. The notion of corporatisation was listed as one of the 167 ‘transformative ideas’ to be implemented in the first 100 days of the Narendra Modi government’s second term. It can be recalled that in the fourth tranche of the Atmanirbhar Bharat initiative, Finance Minister Nirmala Sitharaman had in May this year announced the decision of Corporatisation of OFB for ‘improving autonomy, accountability and efficiency in ordnance suppliers’.

One of the main apprehensions of the employees is that corporatisation would eventually lead to privatisation. Another key concern has been that the corporate entities would not be able to survive the unique market environment of defence products that has very unstable demand and supply dynamics. They also fear job losses.

How has MoD moved forward? Where do the two sides stand?

The decision to go on an indefinite strike from October 12 was announced by the three federations following a strike ballot conducted in June amongst the workers who voted in favour of a nationwide strike against the government move. In the first week of July, the Department of Defence Production (DDP) of the MoD had invited Expression of Interest (EOI) cum Request for Proposal (RFP) for the selection of a consultant for strategising and implementing the proposed corporatisation of the OFB. On September 10, the ministry said it had selected a KPMG Advisory Services-led consortium as a consultant.

On September 11, the MoD announced that the government has constituted an Empowered Group of Ministers (EGoM) for Corporatisation, under the chairmanship of Defence Minister Rajnath Singh ‘to oversee and guide the entire process, including transition support and redeployment plan of employees while safeguarding their wages and retirement benefits’. While the MoD was taking these steps towards finally implementing corporatisation, the federations kept opposing every move of the ministry and said they were firm on going on strike.

On October 1, responding to notice of the strike by three major workers’ federations, the ministry termed the strike “invalid and illegal” on various grounds, especially the ongoing conciliation talks mediated by the Chief Labour Commissioner (Central). On October 9, after a marathon meeting between three federations and the MoD officials, the latter announced that they had deferred their indefinite strike pending conciliation talks with the ministry. The ministry, on the other hand, has agreed not to proceed with corporatisation till talks are on and the top officials and EGoM will discuss the matter with the federations.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Explained News, download Indian Express App.

  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
0 Comment(s) *
* The moderation of comments is automated and not cleared manually by