Ordnance Factory Board (OFB): In a historic decision, the Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday gave its nod to the restructuring of the Ordnance Factory Board (OFB). The OFB operates 41 ammunition and military equipment production facilities and the restructuring will see them turning into seven state-owned corporate entities, a PTI report said. The move is aimed at improving accountability, efficiency and competitiveness of this organisation.  

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While the government announced its decision on this industrial set-up which works under the aegis of Ministry of Defence, it is to be noted that the OFB has a strong workforce with nearly 70,000 government employees working for it. If you want to know what will happen to this strong workforce once the restructuring exercise is completed, here is your answer!   

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Defence Minister Rajnath Singh called this as a "historic decision" stating that there will be no change in service conditions of nearly 70,000 employees of the organisation and that the decision is driven by efforts to boost India's defence manufacturing sector.  

"All employees of OFB (Group A, B and C) belonging to the production units would be transferred to the corporate entities on deemed deputation initially for a period of two years without altering their service conditions as central government employees," PTI report said quoting another official.  

The pension liabilities of the retired and existing employees will continue to be borne by the government, according to the Cabinet decision.  

At present, the government has to shell out around Rs 5,000 crore annually to pay the salaries of the OFB employees. Additionally, it gives around Rs 3,000 crore to OFB as an operational cost.  

The defence ministry has set a goal of a turnover of USD 25 billion (Rs 1.75 lakh crore) in defence manufacturing in the next five years that includes an export target of USD 5 billion (Rs 35,000 crore) worth of military hardware.  

The decision to corporatise OFB on the lines of defence public sector undertakings was taken at a meeting of the union cabinet chaired by Prime Minister Narendra Modi. This was nearly two decades after the reform measure was first mooted to bring professionalism and significantly enhance its productivity, PTI report said quoting the officials. 

The seven entities are likely to take shape by the year's end and they will be operated by professional management with a larger goal of enhancing the product range, increase competitiveness and improve cost-efficiency, PTI reported quoting officials.