Lok Sabha Question No. 61 (STARRED), answered on 2015-07-24
Subject: Ordnance Factories
Ministry: DEFENCE
Asked by: AJAY (TENI) MISRA

**GOVERNMENT OF INDIA**

**MINISTRY OF DEFENCE**

**DEPARTMENT OF DEFENCE PRODUCTION**

**LOK  SABHA**

**STARRED QUESTION NO.61**

**TO BE ANSWERED ON THE 24** **TH** **JULY, 2015**

**ORDNANCE FACTORIES**

*61.	SHRI  AJAY MISRA TENI:

Will the Minister of DEFENCE    j{kk ea=h

be pleased to state:

(a)	The annual production, capacity utilisation and turnover of the Ordnance Units in the country during the last three years;

(b)	whether the Government have drawn any road map for upgradation of Ordnance factories to international levels augment their capacity and turnover and if so, the details thereof;

(c)	whether the Government proposes to export products manufactured in the Ordnance factories after meeting domestic defence requirement and if so, the details thereof; and

(d)	whether steps have been taken by the Government to modernise and encourage indigenous production of defence equipment and if so, the details thereof?

#### A    N    S    W    E    R

MINISTER OF DEFENCE                              	        (SHRI MANOHAR PARRIKAR)

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**(a) to (d):** **A Statement is laid on the Table of the House.**

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**STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (d) OF LOK SABHA STARRED QUESTION NO. 61 FOR ANSWER ON 24.7.2015**

**(a)	The capacity utilization in Ordnance Factories is measured in terms of Standard Man-Hour (SMH) output vis-a-vis SMH input available.  Accordingly, the capacity utilization and Value of Issue (VoI) of Ordnance Factory Board organization as whole is given as under:-**

| **Year**    | **Capacity utilization on SMH basis**   | **Value of Issue**  **(Rs. in crore)**   |
|-------------|-----------------------------------------|------------------------------------------|
| **2012-13** | **129%**                                | **11975**                                |
| **2013-14** | **126%**                                | **11123**                                |
| **2014-15** | **127%**                                | **11354**                                |

**(b)	The following steps are being taken for upgradation of Ordnance Factories to international levels to manufacture arms and ammunition:**

| **(i)**   | **In the 11**  **th**  **plan an expenditure of Rs.2,927 crore was incurred on modernization while in the first 3 years of the 12**  **th**  **plan (2012-15), already an expenditure of Rs.3,189 crore has been incurred on the same.**                                                                                          |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **(ii)**  | **In line with Government’s ‘Make-in-India’ policy, Ordnance Factory Board (OFB) intends to manufacture weapon systems, platforms and ammunition items at the Ordnance Factories in joint collaboration / co-production under Memorandum of Understanding (MOU) with leading OEMs to minimize importation of weapons in future.** |
| **(iii)** | **Accordingly 11 Ordnance Development Centres (ODCs) with identified core technologies have been created.  In these centres OFB has taken up product development and product improvement in core product areas.**                                                                                                                 |
| **(iv)**  | **OFB is working with IITs and other institutions of repute for development of new technologies and associated products.**                                                                                                                                                                                                        |
| **(v)**   | **In order to upgrade the technical skills, officers are being trained in Armament Technology at Cranfield University, UK.  So far 78 officers have been trained.**                                                                                                                                                               |

**......2/-**

**:  2  :**

**(c)	Export opportunities are explored by Ordnance Factories only to utilize the spare capacity, if any, after meeting the requirement of the defence forces.  The annual export by OFB is approximately Rs.21 Crore and some of the major items exported are small and medium calibre weapons, small arms spares, small calibre ammunition, explosives, general stores & clothing etc.**

**(d)	Modernization of defence Units is a continuous process.  To  keep pace with the latest technology and to maintain the production capacity, the replacement of existing plant and machinery takes place through an institutionalized mechanism.  This is in tandem with the requirement of Armed Forces.  With a view to achieve self-reliance in defence production, Defence Procurement Procedure (DPP) has been amended to give preference to “Buy (Indian)” and “Buy and Make (Indian)” categories over “Buy (Global)” category of procurements.  Besides, the procedure for “Buy and Make (Indian)” has been simplified to make it more attractive for the Indian Industry.  Other steps to encourage domestic manufacturing include pruning of the list of defence products requiring industrial licensing and finalization of security manual for defence industries.  Further, in the Union Budget 2014-15, it has been announced that the composite cap of foreign exchange is being raised to 49% with full Indian management and control through FIPB route for defence sector.  Exchange rate variation (ERV) protection has been allowed on foreign exchange component to all Indian companies including private companies.  To establish a level playing field between Indian private sector and the public sector, all the Indian industries are now subjected to same kind of excise and custom duty levies.**

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