Six of the seven new defense companies, which were handed over to the nation during the Vijayadashmi period on October 15, 2021, reported short-term profits during the first six months of their business, namely, October 01, 2021 to March 31, 2022. Outside Yantra India Limited ( YIL), all other companies – Munitions India Limited (MIL); Armored Vehicles Nigam Limited (AVANI); Advanced Weapons and Equipment India Limited (AWE India); Troop Comforts Limited (TCL); India Optel Limited (IOL) and Gliders India Limited (GIL) have reported short-term gains.
Government has taken various steps to initiate and support these new defense companies in launching their businesses as companies. Outstanding indents with the former OFB were amplified and converted into contracts costing approximately Rs 70,776 crore. Compared to the targets for the 2021-22 Fiscal Year, Rs 7,765 million has been invested in new defense companies as a 60% stimulus development prior to the start of the business day. An amount of Rs 2,765.95 crore has been allocated to seven new companies this financial year for maximum investment and equity.
With the operational and financial autonomy given to these new companies, coupled with holding Government in hand, there has been a shift in the performance of Ordnance Factories. In the first six months, these new companies made a profit of more than Rs 8,400 crore, which is significant given the previous OFB Release Rate during the last financial year.
From day one, these companies have begun to explore new markets and expand their businesses, including exports. In the short time since their inception, these companies have been able to secure domestic contracts and export orders without costing more than Rs 3,000 crore and Rs 600 crore respectively. MIL has received the largest export order of Rs 500 crore. These companies also take steps to develop new products through internal and collaborative efforts. YIL has placed an estimated Rs 251 crore in Indian Railways for Axles.
These new businesses have also embarked on a variety of approaches to efficient use of their resources and cost reduction. By focusing on cost reduction, these companies have been able to save an estimated 9.48% accumulation in areas such as overtime and unproductive jobs over the first six months themselves.
The performance of new companies is regularly monitored by the Department for timely, if any, intervention in order to achieve the objectives of the OFB partnership.
It may be recalled that the Government, on June 16, 2021, took a major decision to bring about the long-awaited and radical change in production by transforming the Ordinary Factory Board, the Department of Defense’s sub-office, into seven Governments companies run by professional managers.
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