Corporatisation of the Ordnance Factory Board (OFB)

Context: India’s ordnance factories have posted record export orders of ₹3,500 crore in FY25, the highest ever since corporatisation.

About Corporatisation of the Ordnance Factory Board (OFB):

• What it is?

• In October 2021, the government reorganised 41 Ordnance Factory Board units into seven Defence Public Sector Undertakings (DPSUs)

• Outcome:

• Financial turnaround: from ₹2,844 crore cumulative loss (2019-20) → ₹625 crore profit (2022-23 & 2024-25). Exports surged from ₹81 crore in 2019-20 → ₹3,500 crore in 2024-25. MIL emerged as the top performer; three DPSUs (MIL, AVNL, IOL) granted Miniratna Category-I status.

• Financial turnaround: from ₹2,844 crore cumulative loss (2019-20) → ₹625 crore profit (2022-23 & 2024-25).

• Exports surged from ₹81 crore in 2019-20 → ₹3,500 crore in 2024-25.

• MIL emerged as the top performer; three DPSUs (MIL, AVNL, IOL) granted Miniratna Category-I status.

• Significance:

• Enhances self-reliance (Atmanirbhar Bharat) in defence production. Boosts Make in India and defence exports. Improves efficiency, competitiveness, and R&D investments. Reduces dependence on imports and supports strategic autonomy.

• Enhances self-reliance (Atmanirbhar Bharat) in defence production.

• Boosts Make in India and defence exports.

• Improves efficiency, competitiveness, and R&D investments.

• Reduces dependence on imports and supports strategic autonomy.

Relevance in UPSC Exam Syllabus:

• GS-II (Polity & Governance): Role of PSUs in governance reforms and efficiency. Corporatisation as an alternative to privatisation.

• Role of PSUs in governance reforms and efficiency.

• Corporatisation as an alternative to privatisation.

• GS-III (Internal Security & Economy): Self-reliance in defence sector; indigenisation of technology. Defence exports as a tool of diplomacy and strategic autonomy. Public sector reforms & their impact on economic growth.

• Self-reliance in defence sector; indigenisation of technology.

• Defence exports as a tool of diplomacy and strategic autonomy.

• Public sector reforms & their impact on economic growth.