Ordnance Factory Board dissolved today; assets, employees, management transferred to 7 new defence PSUs

With the decision coming to effect, assets, employees, and management of OFB are being divided into seven newly established defence public sector undertakings (DPSUs), an official order issued by the defence ministry said.

The seven new defence PSUs are – Munition India Ltd, Armoured Vehicles Nigam Ltd, Advanced Weapons and Equipment India Ltd, Troop Comforts Ltd, Yantra India Ltd, India Optel Ltd and Gliders India Ltd.

There will be no change in the service conditions although nearly 70,000 employees of the board are being transferred to these new PSUs, defence minister Rajnath Singh clarified.

The decision on the major reform initiatives was taken by the Union cabinet on June 16.

In an order issued later on September 24, the defence ministry said, “Government of India has decided to transfer, with effect from October 1, the management, control, operations and maintenance of these 41 production units and identified non-production units to seven government companies.”

All the employees of OFB (Groups A, B, and C), belonging to the production units and also the identified non-production units, are to be transferred en masse to the new DPSUs on terms of foreign service.

They will not be provided with any deputation allowance (deemed deputation) initially for a period of two years from the appointed date, an official order stated.

It said each of the new DPSUs is required to frame rules and regulations related to service conditions of the absorbed employees and seek an option for permanent absorption from the employees on deemed deputation to the respective DPSUs within a period of two years, in accordance with Rule 37A of the Central Civil Services (Pension) Rules 1972.

“The service conditions of the absorbed employees would not be inferior to the existing ones,” the order said.

A committee would be constituted by the Department of Defence Production (DDP) for guiding the new DPSUs that the absorption package given is attractive, it added.

The pension liabilities of the retirees and existing employees will continue to be borne by the Government from the Ministry of Defence (“MoD”) budget for Defence Pensions.

"For the employees recruited after January 1, 2004, the National Pension Scheme applicable to the Central Government employees is in vogue and the same may be adopted by the new DPSUs, including the continuation of all special provisions applicable to Central government employees under the National Pension System,” it said.