Dr.Kelkar Committee Recomm. - Copy.doc

251

Government of India

Ministry of DefenceOrdnance Factory Board10-A, S.K. Bose RoadKolkata 700 001

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davp 10201/11/1990/1415

NAIR Committee ReportNAIR COMMITTEE REPORT ON MEDIUM/ LONG TERM GROWTH OF ORDNANCE FACTORIES.

Nair Committee has submitted their report on the subject. They had broadly classified the Ord. Fys in three groups.

In first group they have included 20 factories which they have identified as OPPURTUNITY and have recommended for their Corporatisation.

In the second group they have included 7 factories which they have identified as ASSEST and have recommended for their conversion to Defence Public sector Undertakings.

In the third group they have included 12 factories which they have identified as CHALLENGE and have recommended to be delinked / divested from GOI. opportunity (20) a&e- 10, wv&e-04, m&c- 05, av- 011. AFK A&E 11 GSF wv&e

2. CFA 12.OFT

3. HEF 13 HAPP m&c

4. OFBA 14 RFI wv&e

5. OFBOL 15. SAF wv&e

6. OFCH 16. MSF m&c

7. OFDR 17. OFAJ

8. OFI 18. OFA

9. OFK 19. OF KAT

10 OFV 20. OFD av

ASSETS ( 07) wv&e- 03, av-04 Challenge (12) m&c - 04, wv&e- 03, oef- 051. GCF wv&e 1. OFM m&c

2. OFC wv&e 2. GIF wv&e

3. FGK wv&e 3. VFJ wv&e

4. EFA av 4. OCFC m&c

5. HVF av 5. MTPF m&c

6. OFPM av 6. OF DUM wv&e

7. OLF av 7. OFBH m&c

8. OEFC oef

9. OPF oef

10. OCFS oef

11. OCF AV oef

12 OEFHAZ oef

as PER nair committee report (Effect on NGOs)_______________________________________ opportunity 11264 In Fys to be corporatised ASSETS 4108 in fys to be converted to psuS Challenge 3898 in fys to be disinvested-----------------------------------------------------------

SUP CADRE IN O.FyS 19270

_______________________________________

sUPERVISORY CADRE 00565

POSTED IN HQS/RTIS ETC.

--------------------------------------------------

tOTAL SUP CADRE in ofyS 19835

NAIR COMMITTEE REPORT ON MEDIUM/ LONG TERM GROWTH OF ORDNANCE FACTORIES was re-examined by the committee headed by dR kelkar

Dr. kelkar committee,S RECOMMENDATIONS (DRAFT REPORT)

on restructuring of ordnance factories

GROUPING OF ORDNANCE FACTORIES

STRATEGEIC (20) a&e- 10, wv&e-04, m&c- 05, av- 011 AF KIRKEE A&E 11 GSF COSSIPORE wv&e

2 CF ARUVANKADU 12. OF TRICHI

3 HE FY KIRKEE 13 HAPP TRICHI m&c

4 OF BHANDARA 14 RF ICHAPUR wv&e

5 OF BOLANGIR 15. SAF KANPUR wv&e

6 OF CHANDA 16. MSF ICHAPUR m&c

7 OF DEHU Road 17. OF AMBAJHARI

8 OF ITARSI 18. OF AMBERNATH

9 oF KHAMARIA 19. OF KATNI

10 OF V ARANGAON 20. OF DEHRaduN av

ESSENTIAL ( 07) wv&e- 03, av-04 NON-CORE (12) m&c - 04, wv&e- 03, oef- 05 1 GCF JABALPUR wv&e 1. OF MURADNAGAR m&c

2 OFC KANPUR wv&e 2. GIF JABALPUR wv&e

3 FGK KANPUR wv&e 3. VF J ABALPUR wv&e

4 EFY AVADI av 4. OCF CHANDIGARH m&c

5 HVF AVADI av 5. MTPF AMBERNATH m&c

6 OFPM MEDAK av 6. OF DUM DUM wv&e

7 OLF DEHRADUN av 7. OF BHUSAVAL m&c

8. OEF KANPUR oef

9. OPF KANPUR oef

10. OCF SHAHJAHANPUR oef

11. OCF AVADI oef

12 OEF HAZRATPUR oef

2

AIANGOS KHAMARIA

EXTRACT: DRAFT RECOMMENDATIONS Dr KELKAR COMMITTEE ON

RESTRUCTURING OF ORDNANCE FACTORIES

The committee has also gone through extensive studies that have been done in the past in this area. Based on inputs from previous and our own discussions with the concerned agencies our committee recommends that all existing OFys should be grouped into three categories depending upon the nature of equipment produced by these units. The three categories under which Ordnance Factories would be grouped could be as follows:- strategic this group would consist factories where items have to be produced indigenously at any cost, involve highly complex technology and where quantity may not be large but would any how need to be produced in STRATEGIC interest of the country.

essential this category would include factories that have reasonable core competencies, skill sets, capacities and produce large volumes of mass weapons items and systems required by the Armed forces. the committee feels that such factories have tremendous potential to improve their competitiveness. non-core this category would include factories that produce items that are any way mass produced in the country in the civilian sector also.the committee recommends that the strategic group should be retained in its existing struture in the interest of national security while the essential and non-core groups should be corporatised under leadership of competitive MANAGEMENT. the committee also recommends that corporatisation could be on the lines of bsnl. also as part of hand-holding process the existing dispensation by the GOVERNMENT to the ordnance factories should continue to be given to ofs for a period of another three years to help them steer the change process, internally. along with the financial support ordnance factories will also require training support not only to upgrade their skill sets but. also adopt modern management practices. this would help the two corporations emerge stronger post transition period. AIANGOs standing on the Kelkar Committees report(Draft)

As per the committee due to its present existing set up under the government have a limited decision making power, No responsibilities in functions of R & D, Raw material selection, Vendor development, Quality control & Assurance, Raising financial resources, Marketing & sales, Problems of Obsolescence & Lack of cost effectiveness & having limited abilities to meet users requirement.

As pere committees report (draft)

The 20 factories engaged in production of arms, ammunition weapons

and directly related ones coming within the strategic group

should be retained in existing structure under the OFB

The 07 factories coming under the Essential Group and

The 12 factories coming under the Non-core Group

should be corporatised under two independent corporations, on the

lines of BSNL. The existing dispensation shall continue for three

years.

The committee has made it very clear that not a single factory will be recommended for privatization. It was also made clear that the Pension/Retirement Benefits & job security will continue after corporatisation to ensure no financial loss to the employee

AIANGOs,while opposing the move of corporatisation of the o.Fys, has put the proposal that all the 39 factories are presently engaged in the defence preparedness of the country and are strategic in nature and were designed for the vary purpose. Hence any proposal to trifurcate this organization will prove counterproductive and the it shall hamper the productivity and also paralyse the developmental work of new armament store presently under the process in the factories which have the inter connectivity. Hence it was argued on behalf of AIANGOs that to come over the shortcomings of ordnance factories the full autonomy can be granted to O.F.B. at par with Railway Board.. while allowing operational & financial freedom, with control over functions of R & D, Raw material selection, Quality control, etc .all the 39 fys be retained with the Govt. with the existing set-up under OFB. It was also stated that the 1.20 lakhs employees working in Ordnance Factories are working round the clock to cater the needs of soldiers who give their blood for the nation and since have the self satisfaction of being the soldiers in the plain cloths. Dr Kelkar agreed that the entire workforce of the Ordnance fys are the peace soldiers and have been performing excellent job , but there is a need for all-round betterment of these fys which is possible only though the restructuring of the fys while off-loading the low technology work

The concept of corporatisation was once again vehemently opposed by

all federations/associations present in the meeting..

The employee federations/Associations have been further allowed to

submit their proposal with open mind before 15th July 2005.

From the deliberation in the meeting it appears that ordnance factories are partly heading for corporatisation . The employees federations/ Associations will chalk out the further programme for effectively opposing the move of the Govt.

AIAngos KHAMARIA

Presentation by Dr. Kelkar Committee on Restructuring of

Ordnance Factories at New Delhi PRESENTATION ON THE

DRAFT REPORT

PART ii

RESTRUCTURING

OF

DEFENCE PUBLIC SECTOR

MANDATE OF THE

COMMITTEE

TERMS OF REFERENCE nO 4

to set up a subgroup/subcommittee of members

of the of the main group to examine and make

end recommendations for appropriate changes in

the are the areas as indicated below :-

TO EXAMINE THE CHANGES REQUIRED TO FACILITATE

DPSUs and ordnance factories to assume the

role of designer and integrator , enabling

them to build consortium of industries around

them for product development and production

CONSTITUTION OF SUB- COMMITTEE

THE COMMITTEE CONSTITUTED A SUB-GROUP HEADED BY SHRI JAGDISH KHATTAR MD MARUtI UDYOG LTD. TO SUBMIT ITS DRAFT REPORT

AS PER TERMS OF REFERENCE SUB COMMITTEE SUBMITTED ITS DRAFT REPORT

WHICH HAS BEEN DELIBERATED UPON BY THE MAIN

COMMITTEE

3

existing operating environment

in ordnance factories

functions like govt. department

production of items based on nominations

do not maintain independent accounts

limited decision making power

no responsibility in functions of r & d, raw

material selection , vendor development ,

quality control & assurance , raising financial

resources, marketing and sales

PROBLEM OF OBSOLESCENCE & LACK OF COST

EFFECTIVENESS

structural changes

required in ofs

need to unshakle; necessity for enhanced

autonomy and delegation of powers

operational and financial autonomy with

responsibility and accountability.

formation of joint ventures , production

units and consortiums

tap opportunity for growth through

competitive edge

4

RECOMMENDATIONS

ORDNANCE FACTORIES

FORM THREE CATAGORIES- STRATEGIC ,

ESSENTIAL, AND NONCORE

RETAIN STRATEGIC GROUP IN EXISTING STRUCTURE CORPORATIZE OTHER TWO GROUPS ON LINES OF BSNL.

CORPORATIZATION DOES NOT MEAN PRIVATISATION

CONTINUE EXISTING DISPENSATION FOR THREE YEARS.

TRAINING SUPPORT TO UPGRADE SKILL

SETS: ADOPT MODERN MANAGEMENT

PRACTICES.

VIEWS OF DGOF

CORPORATISE ALL OFS AS ONE CORPORATION UNDER

A STATUTE ON THE LINES OF BSNL

ALLOW OPERATIONAL AND FINANCIAL FREEDOM

CONTROL OVER FUNCTIONS OF R & D RAW MATERIAL SELECTION, VENDOR DEVELOPMENT QUALITY CONTROL AND ASSURANCE , RAISING FINANCIAL RESOURCES, MAEKETING AND SALES

CONTINUE EXISTING DISPENSATION FOR TWO YEARS

5

FORMATION OF BSNL- IMPACT OF CORPORATIZATION ON EMPLOYEES NUMBER OF EMPLOYEES-3.63 LAKHS

KEY ISSUE-TERMS & CONDITIONS OF SERVICE POST CORPORATIZATION

PENSION & RETIREMENT BENEFITS

JOB SECURITY

no financial loss to any employee

FORMATION OF BSNL- IMPACT OF CORPORATIZATION ON EMPLOYEES PENSION & RETIREMENT BENEFITS

ALL EMPLOYEES ENTITLED TO GOVT. SCHEME OF PENSION EVEN AFTER ABSORPTION

TECHNICAL RESIGNATION NOT REQUIRED

PAYMENT OF PENSION MADE BY GOVT

PENSION CONTRIBUTION FROM PSU TO GOVT

JOB SECURITY

ADMINISTRATIVE MINISTRY TO REVIEW ORDER OF REMOVAL/DISMISSAL

AIANGOs/CE/KH/05/01 dT 6-07-2005

tO,

SHRI ALOK PERTI IAS

MEMBER SECRETARY

Dr. KELKAR COMMITTEE &

JOINT SECRETARY (SUPPLIES)

MINISTRY OF DEFENCE

SOUTH BLOCK DHQ PO

NEW-DELHI 110 011sUB :- COMMENTS ON THE DRAFT RECOMMENDATIONS OF dR. KELKAR

COMMITTEE ON RESTRUCTURING OF ORDNANCE FACTORIES

REF :- MOD NO. 8(1)/2004/D (S-III) DATED JUNE 2 2005SIR,

We take this opportunity to record our sincere thanks to the committee headed by Dr Vijaj Kelkar for inviting us on two occasions for deliberations on the subject issue, and for sending us the gist of draft recommendations of the committee on restructuring of the ordnance factories.2. In view of the deliberations held with the committee on the subject issue and the contents of the gist of the draft recommendations received by this association we have formulated our stand on the issue.

3. While communicating our viewpoint , we have formulated our comments on the specific recommendations proposed to be made by the committee.

please find herewith the viewpoint of this association incorporating our

comments on the draft report.

Thanking You,

Sincerely yours

( R R Pashine )

General SecretaryEncl : One

aIAngos Memorandum on the Draft Reportmemorandum

to

committee on restructuring of

ordnance factories

headed by

dr. vijay kelkar

FROM

(AIANGOS)

ALL INDIA ASSOCIATION OF NON-GAZETTED OFFICERS

OF

ORDNANCE & EQUIPMENT FACTORIES

&

QUALITY ASSURANCE ORGANISATIONS

(Ministry of Defence)

Central Executive HQ

ordnance factory, khamaria jabalpur

AIangos/ CE/ KH/ KC/ 05/01 DATED 7th July 2005tO,

dR vIJAY kELKAR

cHAIRMAN

COMMITTEE ON rESTRUCTURING

OF DEFENCE PUBLIC SECTOR

MINISTRY OF DEFENCE

NEW-DELHI

SUB : SUBMISSION OF MEMORANDUM ON COMMITTEES DRAFT RECOMMENDATION

ON rESTRUCTURING OF ORDNANCE FACTORIES UNDER MIN. OF DEFENCE

REF : MOD LETTER NO. 8(1) / 2004/D ( S-III ) DATED 2nd JUNE 2005dEAR sIR,

I have been directed to communicate the following for consideration of the committee on restructuring of the ordnance factories.

2. FROM THE DELIBERATIONS IN THE TWO MEETINGS OF THE COMMITTEE ATTENDED BY THE REPRESENTATIVES OF THIS ASSOCIATION AND THE GIST OF DRAFT RECOMMENDATIONS FORWARDED BY THE COMMITTEE, IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE COMMITTEE IS OF THE OPINION THAT O.fYS HAVE SHORTCOMINGS OWING TO ITS WORKING UNDER THE GOVERNMENTAL SET UP .

3 iT HAS ALSO BEEN OBSERVED FROM THE DRAFT RECOMMENDATIONS THAT THE ORGANISATION LIKE ORDNANCE FACTORIES IS EXPECTED TO COMPETE IN A GLOBAL DEFENCE INDUSTRIAL SECTOR. IN THIS PRETEXT THIS ASSOCIATION IS OF THE OPINION THAT ORDNANCE FACTORIES SHOULD BE STRENGTHENED SO AS TO BE SELF SUFFICIENT FOR THE DEFENCE PREPAREDNESS OF THE COUNTRY AND EMERGES AS THE WORLD CLASS INDIGENOUS DEFENCE PRODUCTION BASE. IN OUR OPINION THERE SHOULD NOT ARISE ANY NEED FOR INDIAN ORDNANCE FACTORIES TO ENTER INTO GLOBAL COMPETITION.

2

4. THE PARA WISE COMMENTS ON THE DRAFT RECOMMENDATION IS

SUBMITTED HEREWITH.

(A) AS PER DR. VIJAY KELKAR COMMITTEE

existing operating environment in ordnance factories





no responsibility in functions of r & d , raw material

selection , vendor development , quality control AND

assurance , raising financial resources, marketing and sales

PROBLEM OF OBSOLESCENCE & LACK OF COST EFFECTIVENESS

existing operating environment in ordnance factories

AS ENUMERATED BY THE COMMITTEE

PARA WISE COMMENTS


Being a Govt. Dept o.fYs are working like any other govt. dept.


o.fYs were designed IN THE PRE-INDEPENDENCE AND POST INDEPENDENCE ERA to meet the SPECIFIC requirements of armed forces, and hence have to go for the mass production of armament / allied stores as ordered by

users. o.fY ORGANISATION IS A 200 YEAR OLD ORGANISATION AND

AS PER THE GRADUAL INCREASE IN THE REQUIREMENTS OF THE

ARMED FORCES THE ORDNANCE FACTORIES WERE established IN

A PHASED MANNER

BEFORE 1st WORLD WAR.. 04 FactoriesAFTER 1st WORLD WAR.. 05 FactoriesAFTER 2nd world war.. 09 factoriesafter independence &

before 1962 05 factories

after 1962 16 factories

(i.e. post Chinese Aggression period)

{ O.Fy Project Nalanda the 40th factory in commissioning /Project stage}

3

as such it is evident that the O.Fys are performing their role

to cater to the SPECIFIC requirements of the armed forces

as was planned.


it is fact that as per executive instructions both accounts & finance is looked after by another agency.

having independent accounting system is an essential requirement for the development and sustained growth of any production organisation.


being a govt. organisation under the dept. of defence production, mod, the decision making power rests with the mod. decision making power is ABSOLUTELY essential for the development of any production organisation. DELEGATION OF POWER THROUGH A LEGISLATION IS A MUST FOR THIS ORGANISATION.

no responsibility in functions of r & d, raw material selection , vendor development , quality control & assurance, raising financial Resources, marketing and sales

as per the system prevailing

the r&d rests with drdo.

the RAW material selection , veNdor development , quality

control & assurance rests with the respective users

representative i.e. DGQA, DGAQA & DGNAI.

IT IS A MATTER OF FACT THAT WHEN THE RESPONSIBILITY OF

ACCEPTABILITY OF FINAL /FINISHED PRODUCT LIES ON THE PRODUCER

i.e. O. FYS , THE R & D , the RAW material selection , veNdor

development quality control & assurance ,SHOULD ALSO BE

THE RESPONSIBILITY OF O.FYS. SINCE IT IS A ESTABLISHED FACT THAT

THE OUTSIDE AGENCIES DO NOT MAKE EXPECTED CONTRIBUTION FOR

THE DEVELOPMENT OF THE ORGANISATION , and prove to be the

unwarranted liability.

4

PROBLEM OF OBSOLESCENCE & LACK OF COST EFFECTIVENESS

OBSOLESCENCE

AS THE MODERN WARFARE HAS TURNED TO BE A VERY SOPHISTICATED WITH THE HELP OF TECHNICAL DEVELOPMENT TAKING PLACE, THE PROBLEM OF OBSOLESCENCE SHALL ALWAYS EXIST, BUT WITH THE CONTINUOUS UPDATING OF TECHNOLOGY THIS AREA CAN BE ADDRESSED EFFECTIVELY FOR WHICH DECISION MAKING POWER IS REQUIRED TO BE ENSHRINED WITH THE O . FYS ONLY.

COST EFFECTIVENESS

IT IS EVIDENT THAT THE ARMS AMMUNITION AND ALLIED ITEMS TO ARMED FORCES & PARAMILITARY FORCES ARE BEING SUPPLIED AT AN GLOBALLY COMPETITIVE PRICES. IN CASE THE O.FYS ARE GIVEN FULL AUTONOMY IN THE AREAS, PARTICULARLY THE DECISION MAKING POWER, quality assurance & entire accounting system which presently contribute towards the overhead expenditure making the production costlier , WILL ENABLE THE O.FYS TO FURTHER REDUCE THE ISSUE/sale PRICES TO USERS. as o.fys will be in a position to take quick and suitable decision to ADOPT THE CONCEPT OF TRANSFER OF TECHNOLOGY (tot), JOINT VENTURE-SHIP WITH OTHER PUBLIC & PRIVATE SECTOR BOTH WITHIN THE COUNTRY AND ABROAD.

(B) structural changes for o.fys

as SUGGESTED BY THE Dr. KELKAR COMMITTEE

need to UNSHACKLE ; necessity for enhanced autonomy

and delegation of powers

operational and financial autonomy with responsibility

and accountability.

formation of joint ventures , production units and

consortiums

tap opportunity for growth through competitive edge Our comments

THE ORDNANCE FACTORY ORGANISATION IS AN TIME TESTED PRODUCTION ORGANISATION, HAVING ALWAYS RISED TO THE occasion AT TIMES OF WARS. THE 1.2 LAKHS skilled and one of the best WORKFORCE, IS ENGAGED ROUND THE CLOCK IN THE DEFENCE PREPAREDNESS OF THE COUNTRY HAVING THE UTMOST SATISFACTION OF THE JOB THAT WE SERVE THOSE WHO SHED THEIR BLOOD TO FENCE OUR BOARDERS. IN FACT WE TREAT oURSELVES AS THE PLAIN CLOTH SOLDIERS.

5 THE FULL AUTONOMY in functions of r & d, raw material selection , vendor development, quality control & ASSURANCE, raising financial Resources , marketing and sales with enhanced decision making powers and operational and financial autonomy SHALL BE A MILESTONE TO TAKE THIS VITAL ORGANISATION TO THE GLORIOUS HEIGHTS , and there will not arise any need for any structural changes in the existing set- up of the ordnance factories.

C) DR. KELKAR COMMITTEES RECOMMENDATIONS ON RESTRUCTURING OF ORDNANCE FACTORIES

FORM THREE CATEGORIES STRATEGIC , ESSENTIAL, AND

NON-CORE

RETAIN STRATEGIC GROUP IN EXISTING STRUCTURE

CORPORATIZE OTHER TWO GROUPS ON LINES OF BSNL.

CORPORATIZATION DOES NOT MEAN PRIVATISATION

CONTINUE EXISTING DISPENSATION FOR THREE YEARS.

TRAINING SUPPORT TO UPGRADE SKILL SETS:

ADOPT MODERN MANAGEMENT PRACTICES.

strategic

this group would consist factories where items

have to be produced indigenously at any cost, involve highly

complex technology and where quantity may not be large

but would any how need to be produced in STRATEGIC interest

of the country.

essential this category would include factories that have reasonable core competencies, skill sets, capacities and produce large volumes of mass weapons items and systems required by the Armed forces. the committee feels that such factories have tremendous potential to improve their competitiveness.

non-core

this category would include factories that produce items that are any way mass produced in the country in the civilian sector also.

the committee recommends that the strategic group should be retained in its existing STRUCTURE in the interest of national security while the essential and non-core groups should be corporatised under leadership of competitive MANAGEMENT.

.

6

(D) AIANGOS SUGGETIONS ON RECOMMENDATIONS

AS PER THE EXISTING PATTERN THE 39 ORDNANCE FYS ARE WORKING UNDER ONE SINGLE NETWORK AS A GOVT. DEPARTMENT, AND ANY ATTEMPT TO TRIFURCATE THEM RETAINING SOME FYS IN THE EXISTING SET-UP UNDER THE GOVT. DEPT, AND CONVERTING OTHERS AS TWO CORPORATIONS MAY PROVE COUNTER PRODUCTIVE SINCE THE CONNECTIVITY BETWEEN THESE 39 FYS REGARDING MEETING USERS REQUIREMENTS AND EXISTING ACTIVITIES OF BEING PRESENTLY ENGAGED IN THE DEVELOPMENT OF NEW WARFARE ITEMS CATERING TO THE NEEDS OF THE USERS, MAY SUFFER A MAJOR SETBACK.

KEEPING IN VIEW THE EXISTING GLOBAL SCENARIO, THE POLITICAL RELATIONS WITH THE NEIGHBORING COUNTRIES AND THE DEFENCE PREPAREDNESS OF THE COUNTRY - IT IS SUGGESTED THAT

this association opposes the planned conversion of some ordnance factories into corporations. as such NO HASTY DECISION BE TAKEN TO CORPORATISE ANY OF THE INDIAN ORDNANCE FACTORIES AS THESE UNITS BEING STRATEGICALLY PLANNED AND DESIGNED, ARE ENGAGED IN THE MOST VITAL AND SENSITIVE ISSUE OF PRODUCTION /SUPPLY OF ARMS /AMMUNITION TO THE MAN OF THE FIGHTING FORCES WHO SHED THEIR BLOOD TO DEFEND BORDERS of OUR COUNTRY , AND NOT OF ANY CONSUMER ITEM OF GENERALISED IMPORTANCE.

THE 39 ORDNANCE FYS HAVING INTER-CONNECTIVITY BE RETAINED IN ITS PRESENT EXISTING SINGLE SET-UP AS A GOVT. DEPARTMENT UNDER MINISTRY OF DEFENCE.

TO ADDRESS THE enLISTED SHORTCOMINGS AND STRENGTHENING THE ORDNANCE FACTORIES, it DO NOT ESSENTIALLY REQUIRE TO MAKE ANY STRUCTURAL CHANGES, BUT CAN BE ADDRESSED THROUGH NECESSARY GOVERNMENTAL ORDER TO GRANT THE FULL AUTONOMY TO O.FYS FUNCTIONING UNDER THE OF BOARD AT PAR WITH THE RAILWAY BOARD WHICH IS FUNCTIONING AS GOVT. DEPARTMENT WITH FULL AUTONOMY AND HAS CREATED HISTORY AS THE MOST SUCCESSFUL SINGLE LARGEST ORGANISATION OF THE WORLD FUNCTIONING UNDER GOVERNMENTAL SET- UP. we are confident that when EVEN AFTER THE ENLISTED SHORTCOMINGS DUE TO LACK OF AUTONOMY THE ORDNANCE FACTORIES HAVE BEEN FUNCTIONING WITHOUT ANY BUDGETARY SUPPORT AND HAVE BEEN GENERATING THE NET SURPLUS FOR THE COUNTRY WHILE MAINTAINING THE SUSTAINED GROWTH RATE. IT IS NEEDLESS TO SAY THAT MANY OF THE PSUs / CORPORATIONS NEITHER EARN ANY PROFIT NOR HAVE RECORDED ANY GROWTH.7

AFTER GIVING FULL AUTONOMY TO THE OF BOARD, IT SHOULD BE KEPT UNDER OBSERVATION FOR A PERIOD OF 5 YEARS TO MONITOR THE DEVELOPMENTAL CHANGES AS A RESULT OF GIVEN AUTONOMY. IN CASE THE DESIRED CHANGES ARE NOT VISIBLE THEN THE GOVT. SHOULD FORMULATE THE REVIEW COMMITTEE COMPRISING OF THE SENIOR SERVING / RETIRED BUREAUCRATS AND TECHNOCRATS (defence production / financial experts) FOR TAKING FURTHER NECESSARY MEASURES.

conclusion

in view of the foregoing paras it is submitted that the ordnance factory organisation be allowed full financial and operational autonomy with enhanced decision making power .we are confident this will address the enlisted areas of shortcomings. as such all the 39 ordnance factories be continued to function under the ordnance factory board with the GOVERNMENTAL set-up, so as to ensure that the organisation emerges as the world class defence production base.

Thanking you ,

( R. R .PASHINE )

GENERAL SECRETARY

Copy to: Chairman

OFB HQ Kolkata ( Through Dir / IR)

AIANGOS CE HQ KHAMARIA

EXTRACT: DRAFT RECOMMENDATIONS Dr KELKAR COMMITTEE ON

RESTRUCTURING OF ORDNANCE FACTORIES

The committee has also gone through extensive studies that have been done in the past in this area. Based on inputs from previous and our own discussions with the concerned agencies our committee recommends that all existing OFys should be grouped into three categories depending upon the nature of equipment produced by these units. The three categories under which Ordnance Factories would be grouped could be as follows:- strategic this group would consist factories where items have to be produced indigenously at any cost, involve highly complex technology and where quantity may not be large but would any how need to be produced in STRATEGIC interest of the country.

essential this category would include factories that have reasonable core competencies, skill sets, capacities and produce large volumes of mass weapons items and systems required by the Armed forces. the committee feels that such factories have tremendous potential to improve their competitiveness. non-core this category would include factories that produce items that are any way mass produced in the country in the civilian sector also.the committee recommends that the strategic group should be retained in its existing struture in the interest of national security while the essential and non-core groups should be corporatised under leadership of competitive MANAGEMENT. the committee also recommends that corporatisation could be on the lines of bsnl. also as part of hand-holding process the existing dispensation by the GOVERNMENT to the ordnance factories should continue to be given to ofs for a period of another three years to help them steer the change process, internally. along with the financial support ordnance factories will also require training support not only to upgrade their skill sets ,but also adopt modern management practices. this would help the two corporations emerge stronger post transition period.FINAL REPORT OF THE dR vIJAY KELKAR cOMMITTEE ON RESTRUCTURING OF ORDNANCE FACTORIES

* tHE REPORT RECOMMENDS CORPORATRISATION OF ALL THE 39

ORDNANCE FACTORIES UNDER ONE CORPORATION. * THE REPORT HAS BEEN PRESENTED to the PARLIAMENTARY

COMMITTEE ON DEFENCE ON 7 th & 8 th Nov 2005.

* the report has been submitted to the defence minister on

10-11-2005

final decision of the govt is awaited.

AIANGOs/CE/KH/05/ dT 19-11-2005

tO,

The Raksha Mantri

Raksha Mantralaya

south block DHQ PO

New Delhi

sUB :- observation of anti corporatisation day against the FINAL report OF dR. KELKAR COMMITTEE ON RESTRUCTURING

OF ORDNANCE FACTORIES

REF :- 1. Draft recommendations of Dr Kelkar Committee circulated vide

MOD No. 8(1)/2004/D (S-III ) Dated June 2, 2005

2. Memorandum submitted by AIANGOs vide our letter no

AIANGOs/CE/KH/05/01 Dt 06-07-2005

3. Meeting with Chairman OFB Hq Kolkata held on 09-11-2005

Sir ,

I have been directed to submit the following for your information and necessary action please.

2 This association has come to know that Dr Kelkar committee on restructuring of ordnance factories and the Defence PSUs has submitted the final report to the Govt on 10-11-2005, wherein it has been recommended to corporatise all the 39 factories under a single corporation. We had received the draft recommendation of the committee vide MOD letter referred at (i) above, and we had submitted our memorandum incorporating the Para-wise comments on the same. It is most unfortunate that ultimately the committee has finally recommended to corporatise the ordnance factories.3 This association opposes the planned conversion of the ordnance factories into corporations. It is reiterated that no hasty decision be taken to corporatise any of the Indian Ordnance factories as these units have been strategically planned/designed and are engaged in the most vital and sensitive issue of production/supply of arms ammunition to the man of the fighting forces, who shed their blood to defend the boarders of our country ,and not of any consumer item of generalized importance.4. The 39 Ordnance factories having inter connectivity be retained in its present existing set - up as a government department under the ministry of Defence..5. to address the enlisted shortcomings and strengthening the ordnance factories, it do not essentially require to make any structural changes, but can be addressed through necessary governmental order to grant the full autonomy to O.Fys functioning under the OF Board at par with the railway board which is functioning as govt. department with full autonomy and has created history as the most successful single largest organisation of the world functioning under governmental set- up. We are confident that, when even after the enlisted shortcomings due to lack of autonomy the ordnance factories have been functioning without any budgetary support and have been generating the net surplus for the country while maintaining the sustained growth rate. It is needless to say that many of the PSUs / Corporations neither earn any profit nor have recorded any growth. 6 As communicated through our memorandum referred at (ii) above it is once again submitted that the ordnance factory organisation be allowed full financial and operational autonomy with enhanced decision making power .we are confident this will address the enlisted areas of shortcomings. as such all the 39 ordnance factories be continued to function under the Ordnance Factory Board with the governmental set-up, so as to ensure that the organisation emerges as the world class defence production base.

7 As a mark of protest against the proposed corporatisation by the Dr Kelkar Committee the members of this association working in the ordnance factories and the Quality Assurance organisations under DGQA, DGAQA & DGANAI through-out the country shall wear black badges during the working hours on 25-11-2005, observing the day as ANTI_CORPORATISATION DAY.

It is also requested that before taking any final decision on the Dr Kelkar Committee report the matter should be discussed in depth with the employees representatives of the Federation/Associations functioning in the Ordnance factories.

Thanking You ,

Sincerely Yours

( R.R. Pashine )

General Secretary

Copy to:

The Secretary

Ministry of Defence New- Delhi

The Secretary Defence Production

Ministry of Defence South Block New-Delhi

Chairman OFB HQ Kolkata

Director General

DGQA HQ New-Delhi

Director General

DGAQA HQ New-Delhi

Director General

DGNAI HQ New-Delhi

Dear Sir,

Participation of 13 employees of Ordnance Factory Medak for the progrmme RM02 is confirmed.

Details of RM 02- Short term training on dry rubber goods manufacture is given below.

Course Content: Natural and synthetic rubbers, compounding ingredients, principles of rubber compounding, moulded, extruded and calendered goods, process control and vulcanisates tests etc.

Duration : 8days

Date :09-18 February 2015(14 & 15 th January 2015 are holidays beingSaturday&Sunday)Fees: Rs.3200/- per person. + (service tax 12.36%)

Payments:- The course fee can be remitted to our account with Central Bank of India, RRII, Kottayam IFSC Code CBIN 0284156 A/c No. 1450300184. Please bring the remittance receipt at the time of registration at Rubber Training Institute.

Accommodation: Accommodation at the RTI hostel is available @ Rs. 250/- per day for boarding & lodging during training days and Rs. 375/- per day on intervening holidays. Also a list of Hotels in Kottayam with phone Nos. is available in our webwww.rubberboard.org.in

For Clarifications contact Ph.no.0481 2353325

SMS (RT)

Dear Sir,

Participation of 13 employees of Ordnance Factory Medak for the progrmme RM02 is confirmed.

Details of RM 02- Short term training on dry rubber goods manufacture is given below.

Course Content: Natural and synthetic rubbers, compounding ingredients, principles of rubber compounding, moulded, extruded and calendered goods, process control and vulcanisates tests etc.

Duration : 8days

Date :09-18 February 2015(14 & 15 th January 2015 are holidays beingSaturday&Sunday)Fees: Rs.3200/- per person. + (service tax 12.36%)

Payments:- The course fee can be remitted to our account with Central Bank of India, RRII, Kottayam IFSC Code CBIN 0284156 A/c No. 1450300184. Please bring the remittance receipt at the time of registration at Rubber Training Institute.

Accommodation: Accommodation at the RTI hostel is available @ Rs. 250/- per day for boarding & lodging during training days and Rs. 375/- per day on intervening holidays. Also a list of Hotels in Kottayam with phone Nos. is available in our webwww.rubberboard.org.in

For Clarifications contact Ph.no.0481 2353325

SMS (RT)

Documents

Dr.Kelkar Committee Recomm. - Copy.doc