On 5 July 2026, a 19-member delegation led by the Bharatiya Mazdoor Sangh (BMS) called on Union Minister Dr. Jitendra Singh and thanked the government for a decision that has quietly settled one of the biggest anxieties in India's defence-industrial workforce: the redeployment of nearly 65,000 erstwhile Ordnance Factory employees into regular government service. The measure closes a loop that opened in 2021, when the two-century-old Ordnance Factory Board (OFB) was dissolved and restructured. For an NDA or CDS aspirant, this is a compact case study in defence production, public-sector reform and self-reliance (Aatmanirbharta) — themes the defence paper returns to often.
What was the Ordnance Factory Board?
The Ordnance Factory Board was, for over 200 years, the backbone of India's military-industrial base — a chain of ordnance factories (its origins trace to the first factory at Cossipore/Ichapore near Kolkata in 1801-02) manufacturing everything from small arms and ammunition to artillery, armoured vehicles, troop clothing and parachutes. It functioned as a subordinate office of the Ministry of Defence, run departmentally rather than as a company — which, critics argued, made it slow, monopolistic and short on accountability. Understanding where the OFB sat in the defence ecosystem pairs well with the wider defence and national-security general knowledge an NDA candidate must carry.
The 2021 corporatisation
In a major structural reform, the government dissolved the OFB with effect from 1 October 2021 and reorganised its 41 production units into seven new Defence Public Sector Undertakings (DPSUs) — 100% government-owned corporate entities. The seven, which are worth memorising as a set, are:
- Munitions India Limited (MIL) — ammunition and explosives
- Armoured Vehicles Nigam Limited (AVNL / AVANI) — tanks and armoured vehicles
- Advanced Weapons and Equipment India Limited (AWEIL) — weapons and equipment
- Troop Comforts Limited (TCL) — clothing, tentage and general stores
- Yantra India Limited (YIL) — components, chemicals and ancillaries
- India Optel Limited (IOL) — opto-electronics and fire-control systems
- Gliders India Limited (GIL) — parachutes and aerostores
The stated aims were to improve accountability, efficiency, product quality and competitiveness, to let each entity specialise and pursue exports, and to reduce the historical dependence of the armed forces on a single monopoly supplier.
The employee question — and why 5 July matters
Corporatisation created immediate anxiety among the roughly 70,000-strong OFB workforce: would they remain central-government employees, with their pensions and service conditions intact, or become company staff? The government's phased answer — first deemed deputation to the new DPSUs, and now the decision to redeploy nearly 65,000 employees into regular government service until retirement — is what the BMS delegation welcomed on 5 July. Dr. Jitendra Singh, speaking as a member of the Empowered Group of Ministers (EGoM) that oversaw the transition, framed it as part of a broader employee-centric, consultative approach to governance. The delegation also raised open issues — extending the Old Pension Scheme to compassionate-appointment cases, career progression and cadre matters — which shows how public-sector reform is negotiated between government and organised labour over years, not settled overnight.
The bigger picture: self-reliance in defence
The OFB reform is one piece of a much larger push for Aatmanirbhar Bharat in defence. An aspirant should be able to connect it to the surrounding policy scaffolding:
- Positive Indigenisation Lists — successive lists of items banned from import to force domestic sourcing.
- Raised FDI in defence — up to 74% via the automatic route and 100% via government approval.
- iDEX (Innovations for Defence Excellence) and the Defence Acquisition Procedure (DAP) 2020 with its "Buy Indian-IDDM" (Indigenously Designed, Developed and Manufactured) top priority.
- Rising defence exports, which crossed record highs in recent years.
Placed in this context, turning a departmental monopoly into seven competing, corporatised, export-capable manufacturers is meant to make the defence-industrial base leaner and more innovative — while the redeployment decision protects the workforce that keeps it running. Balancing efficiency reform with worker security is exactly the two-sided analysis a strong CDS/OTA answer should offer, and it links naturally to the economy syllabus on public-sector undertakings and disinvestment.
The wider defence-manufacturing map
The seven new DPSUs do not exist in isolation — they join an ecosystem of established defence public-sector giants that an aspirant should be able to name and place:
- DRDO (Defence Research and Development Organisation) — the R&D umbrella (est. 1958), which designs systems such as the Agni and Prithvi missiles, Tejas avionics and Arjun tank; headed by the Chairman who is also Secretary, Department of Defence R&D.
- HAL (Hindustan Aeronautics Limited) — aircraft (Tejas LCA, helicopters), Bengaluru-based.
- BEL (Bharat Electronics Limited) — radars, electronics and communication systems.
- BDL (Bharat Dynamics Limited) — missiles and torpedoes.
- Mazagon Dock, GRSE, Goa Shipyard, Cochin Shipyard — warship and submarine builders.
Alongside these sits the Strategic Partnership (SP) model of DAP 2020, which pairs an Indian private firm with a foreign OEM to build platforms (submarines, fighter jets, helicopters, armoured vehicles) domestically with technology transfer. India's defence exports have climbed to record levels — crossing well past ₹21,000 crore in recent years — with a stated target of ₹50,000 crore, and the corporatised ordnance entities are expected to contribute to that export line. Framing the OFB reform inside this bigger map — DRDO for design, DPSUs for manufacture, the SP model for private participation, and rising exports as the outcome — is what turns a one-line news fact into a well-argued self-reliance answer.
A note on the workforce dimension
The human side deserves its own line in any balanced answer. Corporatisation of a 200-year-old departmental organisation inevitably unsettles tens of thousands of families whose service conditions, pensions and seniority were built around government employment. The government's sequencing — deemed deputation first, then redeployment into regular government service until retirement — is a study in managing change without breaking the social contract with organised labour. The unresolved asks the BMS delegation raised (Old Pension Scheme for compassionate-appointment cases, career progression, cadre rationalisation) show that such reforms are settled through continuous institutional dialogue, and that "reform" and "welfare" are presented by the government as complementary rather than opposed.
🎯 Practice MCQs
Q1. The Ordnance Factory Board (OFB) was dissolved and reorganised into how many new Defence PSUs? (a) 3 (b) 5 (c) 7 (d) 9 → (c) The OFB's 41 units were reorganised into 7 new Defence PSUs with effect from 1 October 2021.
Q2. With effect from which date was the OFB corporatised into the new DPSUs? (a) 15 August 2020 (b) 1 October 2021 (c) 26 January 2022 (d) 1 April 2023 → (b) The reform took effect from 1 October 2021.
Q3. Which of the following new DPSUs manufactures ammunition and explosives? (a) Troop Comforts Limited (b) India Optel Limited (c) Munitions India Limited (d) Gliders India Limited → (c) Munitions India Limited (MIL) handles ammunition and explosives; Gliders India makes parachutes; India Optel makes opto-electronics.
Q4. The 5 July 2026 news concerned securing the future of approximately how many erstwhile Ordnance Factory employees? (a) 15,000 (b) 35,000 (c) 65,000 (d) 1,20,000 → (c) Nearly 65,000 employees are being redeployed into regular government service.
Q5. Under current policy, FDI in the defence sector via the automatic route is permitted up to: (a) 26% (b) 49% (c) 74% (d) 100% → (c) FDI up to 74% is allowed through the automatic route, and up to 100% via the government route, as part of the Aatmanirbhar defence push.
📋 How this gets asked (PYQ pattern)
Defence-production reform shows up in NDA/CDS in a few dependable ways. The most common is a factual MCQ on the OFB corporatisation — the number of new DPSUs (7), the effective date (1 October 2021), or matching a DPSU to its product line (Munitions India = ammunition, India Optel = opto-electronics, Gliders India = parachutes). A second angle bundles it with the Aatmanirbhar Bharat toolkit — positive indigenisation lists, 74% defence FDI, iDEX, DAP 2020 — as a "which of the following is/are correct" statement set. In interview and descriptive answers, the recurring theme is "evaluate defence self-reliance" or "public-sector reform versus worker interests," where the 65,000-employee redeployment is a ready example of balancing efficiency with security of tenure. As always, don't fabricate a specific past-paper number; show that you know the reform package and can argue its pros and cons. Revise this with DRDO, HAL, BEL and the Strategic Partnership model for full defence-production coverage.
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Written by Col D.N. Sharma, Cavalier faculty (Defence Studies & SSB). Follow The Cavalier Academy on Facebook and YouTube.
Source: Ministry of Personnel / PIB Delhi, "Government secures future of nearly 65,000 erstwhile Ordnance Factory employees through redeployment into Regular Government Service: Dr. Jitendra Singh," 5 July 2026, PRID 2281295; OFB corporatisation facts cross-verified against Ministry of Defence records.