Indian Trade Unions call for protest on July 23 against Privatization of Defence Production

The Joint Platform of Central Trade Unions and Sectoral Independent Federations and Associations, in its meeting held on July 8, which comprises INTUC, AITUC, HMS, CITU, AIUTUC, TUCC, SEWA, AICCTU, etc. along with independent sectoral federations and associations, has unanimously called for a nationwide protest day to be observed on July 23 across India against the attempt by the Centre to privatize Defence Production and corporatize OFB (Ordnance Factories Board).

Source: PTI


The CTUs noted that besides the corporatization bid, “a substantial part of the Defence-related production is being outsourced to the private sector, both indigenous and foreign, permitting 100% FDI (Foreign Direct Investment)". Also, the CTUs condemned the ‘draconian’ Essential Defence Services Ordinance (2021), which the Law Ministry notified on May 30 effectively prohibiting employees engaged in essential Defence services from taking part in any agitation or strike.


When the Centre decided to split and dissolve the 220-year-old, Kolkata Head-Quartered OFB (Ordnance Factories Board) into seven new DPSUs (Defence Public Sector Undertakings), it evoked strong opposition from many major employee federations comprising over 76,000 employees working in OFB. The federations announced they would go on an indefinite strike from July 26, protesting against the startling decision taken by the Centre to corporatize the OFB.


“All these measures are going to severely weaken the indigenous production network of all basic requirements of the defence forces, much to the detriment of national interests. The Defence Employees Federations have been fighting unitedly with determination and commitment against these anti-national policies.”

— From a statement issued by the Joint Platform of Central Trade Unions


The Essential Defence Services Ordinance (2021) essentially bans the right-to-strike of employees working in the Defence Production sector, but also empowers the government by extending the suppression of dissent to other sectors as well. CTU strongly criticized this move by the Centre, which is really meant to suppress the "rising discontent and anger among the Defence Production employees against these brutal anti-national policies".


Besides the act of Corporatization by the Centre, the CTUs noted that the "substantial part of the Defence-related production is being outsourced to the private sector, both indigenous and foreign, permitting 100% FDI (Foreign Direct Investment)". The BJP-led Central Government has principally agreed to privatize 41 Ordnance Factories through the back door, and against the will of the employees which may hamper the production of arms and ammunition.


First, all the 41 companies will be dissolved into seven state-run corporations, then the Government will begin selling its Stake in the companies. As per news sources, liberalizing the defence sector tops the list of the agenda for many reasons like an ongoing standoff with China, lack of employment, and a bad economy. However, the government denied the allegations, saying corporations will be run by the government only.


But, as per the plan, employees working in these Ordnance factories will be sent on deputation in these corporations for two years. Then a performance review will be done.


Currently, there are eight public sector companies working in the Defence sector. The number will go up to 15 after the formulation of seven corporations.


Corporatization was listed as one of the 167 ‘transformative ideas’ to be implemented in the first 100 days of the second term by the BJP-led Centre. The workforces and the Trade Unions are concerned that corporatization would “eventually lead to privatization. They also fear job losses. Another key apprehension has been that the corporate entities cannot survive the uncommon market of Defence products that have very volatile demand and supply dynamics.