An audit report prepared by the Controller General of Defence Accounts (CGDA), has raised serious questions on the functioning of the Ordnance Factory Board (OFB), which, allegedly sells its products to soldiers at a price higher than the market rate. The CGDA has also accused the OFB of failing to meet the demands of the soldiers within the stipulated time.
The CGDA is responsible for financial advice, payment, accounting and internal audit of the expenditure and receipts of the defence services. The OFB consists of the Indian Ordnance Factories that manufacture weapons and products for the use of the armed forces.
The CGDA, in its report “Reasons for resorting to local purchases of items under Central procurement in respect of two items namely Ration and clothing stores”, has said that due to the absence of a sound pricing formula and non adherence of a uniform pricing policy, the OFB is fixing its own prices. The OFB functions under the Department of Defence Production of the Ministry of Defence (MoD).
Giving examples, the audit report says that a “V neck woollen jersey” which costs Rs 690 in the market is being sold by the OFB for Rs 1,900; a pair of “high ankle boots”, which the OFB is selling for Rs 2,900 is available for Rs 1,090 in the market; a “mosquito net” sold for Rs 780 by the OFB is available for Rs 388 outside.
Five ordnance factories—Ordnance Clothing Factory Avadi, Uttar Pradesh; Ordnance Parachute Factory Kanpur; Ordnance Equipment Factory, Kanpur; Ordnance Clothing Factory, Shahjahanpur; and Ordnance Equipment Factory, Hazratpur—are responsible for producing boots, jackets, trousers, mosquito nets, shirts, etc., for the jawans serving in the Army and the para-military forces.
“The products made by the OFBs are over-priced, and are not available when needed, due to which a jawan is automatically forced to buy it from the open market. Is this being done deliberately to help private manufacturers? This is something that only the top brass of the Ministry of Defence can find out,” said a serving Army captain, requesting anonymity.
The report also says that there are systemic deficiencies in “target fixation” regarding the number of products that are to be manufactured by these OFBs. “The target fixation mechanism suffers from systemic deficiencies such as inordinate delay in communication of firm requirement by the Director General of Ordnance Services (DGOS) and Ordnance Equipment factories and poor flow of information about the item wise capacity of factories.”
According to the audit, there is a long time lag of 313 days in the placement of orders and the final supply of the products which involves 36 steps. “Due to non-supply of clothing items, troops are compelled to use old clothing or purchase the items from local market at their own expense”, reads the report. It also states that “Ordnance factories could not supply fully, quantity of clothing items due to their limited manufacturing capability and non-utilization of manpower and machinery.”