Repainting the White Elephant

Hectic moves within the defence ministry suggest the Modi government is working to end one of the government’s last monopolies—ordnance factories.

- Sandeep Unnithan

For nearly 70 years, the ordnance factories that supplied the armed forces with everything from boots to battle tanks thrived as a government monopoly.

This meant the armed forces had no option but to buy what they produced. Then, this year, the ministry of defence (MoD) made its first moves to open one of its last bastions to the harsh light of competition. The full contours of what is being planned are yet to be revealed, but a study of the agenda points of meetings suggests a major change in thinking within the ministry.

In February, a letter went from the Prime Minister’s Office to the secretary (defence production), asking for lists of ordnance factory board products, plant and machinery and, more significantly, the land held by each of the 41 factories operating under the MoD’s department of defence production.

The letter was followed by a series of policy moves signalling that business as usual was coming to an end within the ordnance factories, long criticised by the armed forces for supplying substandard, overpriced equipment. In April, the MoD invited the private sector to participate in tenders to supply nine types of ammunition for tanks and howitzers, hitherto a preserve of the ordnance factories. On April 27, an MoD circular to the chairman of the Ordnance Factory Board (OFB) identified a list of 143 ‘non-core’ items, ranging from uniform cloth and sleeping bags to military trucks, that the army could buy from the open market. The shape-up or ship-out approach was outlined in the circular: ‘…the MoD can identify non-core activities that can be either closed down or put on the PPP model for optimal use of the OFB’s vast infrastructure and skilled manpower’.