Modi Government Working To End Among Its Last Monopolies - Ordnance Factories

The monopoly enjoyed by government-owned ordnance factories is coming to an end with the Ministry of Defence (MoD) kicking off the procedure to invite private players in the area, as reported by India Today.

The action has been taken in view of the factories being unable to meet production goals for years while also supplying substandard military hardware, the report says.

The MoD, in April, invited private sector players to participate in tenders to supply nine types of ammunition for tanks and howitzers. A clear ‘shape-up or ship-out’ circular had also been issued to the Ordnance Factory Board (OFB) on 27 April citing 143 non-core items like uniforms and sleeping bags that the military could buy from the open market.

A report submitted earlier by the additional Controller General of Defence Accounts (CGDA) A K Saxena pointed towards the OFB's serious inefficiencies and overcharging the army several hundred crores in cases ranging from battle tanks to clothing to general stores.

Saxena says in his report, "Make in India will fail unless the ordnance factories are corporatised, or better still, get into partnerships with the private sector. There is no way for them but to compete.”

OFB chairman S C Bajpai and Secretary (Defence Production) Ashok Kumar Gupta have since identified four factories, the Rifle Factory Ishapore, Small Arms Factory Kanpur, Ordnance Factory Project Korwa and Ordnance Factory Trichy for possible public-private partnerships (PPP).