Provide financial support to 7 new defense companies if needed: Rajnath Singh
On Friday, seven new defense public sector companies, spun off from the former Ordnance Factory Board (OFB), were dedicated to the nation by Prime Minister Narendra Modi as part of a major reform initiative to boost the defense production of India.
Defense Minister Rajnath Singh said the government would support businesses initially through financial and non-financial interventions if necessary.
The Defense Ministry said the companies started working on October 1.
The new business launch event was held on a day when the country celebrated ‘Vijayadashami‘.
On June 16, the Union Cabinet approved a long-standing proposal to restructure the more than 200-year-old Ordnance Factory Board, which operated 41 munitions and military equipment production facilities into seven public entities. in order to improve its accountability, efficiency and competitiveness.
The OFB was dissolved on October 1 and its assets, employees and management were transferred to the seven companies.
In his speech, Prime Minister Modi said the seven new companies will provide a solid foundation for the country’s military strength in times to come.
The seven new defense companies are Munitions India Limited (MIL), Armored Vehicles Nigam Limited (AVANI), Advanced Weapons and Equipment India Limited (AWE India), Troop Comforts Limited (TCL), Yantra India Limited (YIL), India Optel Limited (IOL) and Gliders India Limited (GIL).
In his video address, PM Modi noted the auspicious opportunity to ‘Vijayadashami‘and the tradition of worshiping guns and ammunition on the same day.
“He said that in India we see power as a means of creation. He pointed out that with the same spirit the nation is moving towards strength,” a government statement said.
Calling the decision to convert OFB into seven defense companies “historic,” Defense Minister Singh said the move reflected the government’s desire to achieve self-sufficiency in defense production.
Noting that new businesses will have full growth potential, Singh said that, if necessary, the government will provide support initially through financial and non-financial interventions.
He said the reform measure would provide autonomy to these companies and improve accountability and efficiency.
“The objective of this restructuring is to transform munitions factories into productive and profitable assets, to improve expertise in the product range, to increase competitiveness, to improve quality, to improve profitability and to ensure autonomy in the preparation of the defense, “he said.
Mr Singh hoped that in the times to come, these new companies would not only play an important role in the defense manufacturing ecosystem, but would also be growth engines for the Indian economy.
He added that restructuring is an ongoing process and not an end in itself.
The Minister of Defense declared that all the employees of the former OFB (group A, B and C) belonging to the production units will be transferred to legal persons on deemed deputy for a period of two years without any modification of their conditions of employment. service as central administration staff. .
“The country’s defense sector has reached higher heights due to reforms undertaken by the government in recent years. We have created an ecosystem conducive to exports and FDI,” he said.
Mr Singh added that the Defense Ministry has set a target of achieving a turnover of Rs 1.75 lakh crore in aerospace and defense goods and services by 2024, including exports of Rs 35,000 crore.
Jayant Patil, president of the Society of Indian Defense Manufacturers (SIDN) praised the creation of the seven companies.
“Our country’s defense industry aspires to become a global brand. As the Prime Minister envisions, the industry can leverage mutual strengths to improve India’s competitiveness with global quality, sustained reliability through research and development and innovation to be a force to be reckoned with on the world stage, ”he said.