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Forty-Third Report of the Standing Committee on Defence

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Forty-Third Report of the Standing Committee on Defence STANDINGCOMMITTEE ONDEFENCE 43 (2017-2018) SIXTEENTHLOKSABHA MINISTRYOFDEFENCE DEMANDSFORGRANTS (2018-2019) ORDNANCEFACTORIES,DEFENCERESEARCHANDDEVELOPMENT ORGANISATION,DIRECTORATEGENERALOFQUALITYASSURANCEAND NATIONALCADETCORPS (DEMANDNO.20) FORTY-THIRDREPORT LOKSABHASECRETARIAT NEWDELHI March,2018/ Phalguna,1939( Saka) FORTY-THIRDREPORT STANDINGCOMMITTEEONDEFENCE (2017-2018) (SIXTEENTHLOKSABHA) MINISTRYOFDEFENCE DEMANDSFORGRANTS (2018-2019) ORDNANCEFACTORIES,DEFENCERESEARCHANDDEVELOPMENT ORGANISATION,DIRECTORATEGENERALOFQUALITYASSURANCEAND NATIONALCADETCORPS (DEMANDNO.20) PresentedtoLokSabhaon 13.03.2018 LaidinRajya Sabha on 13.03.2018 LOKSABHASECRETARIAT NEWDELHI March,2018/ Phalguna,1939( Saka) C.O.D.No.201 Price : R144.00 ©2018B YLOKSABHASECRETARIAT PublishedunderRule382oftheRulesofProcedureandConduct ofBusinessinLokSabha(FifteenthEdition)andprintedby JaincoArtIndia,NewDelhi-110005. CONTENTS PAGE COMPOSITION OF THECOMMITTEE(2017-18) ................................ (iii) INTRODUCTION ................................................................. (v) REPORT PARTI C HAPTERI OrdnanceFactoriesBoard ................................ 1 CHAPTERII DefenceResearchandDevelopmentOrganisation ... 28 CHAPTERIII DirectorateGeneralofQualityAssurance ............. 55 CHAPTERIV NationalCadetCorps ...................................... 60 PARTII Observations/Recommendations ................................ 63 ANNEXURES A. Currentstatusofvariousongoingcapacityaugmentation/ creationprojects .................................................. 73 B. ListofitemsdevelopedinOrdnanceFactoriesthrough DRDOTOTandindigenizationofForeignOEM’sTOT ...... 78 C. Listofitemsdevelopedthroughin-houseR&DofOrdnance Factoriesonitsown .............................................. 81 D. Products/Systems/TechnologiesdevelopedbyDRDOand Inducted/UnderInductionintoServicesason15.12.17... 84 E. Thedetailsi.e.dateofsanction,costandPDCofongoing projects(Cost>Rs.100crore)thataredelayed ........... 85 F. MajorbenefitsaccruedtoDRDOanddefenceservicesby theprojectssponsoredduring12thPlan ..................... 91 G. 6centersofExcellence/AdvancedtechnologyCentres establishedbyDRDO .............................................. 93 APPENDICES MinutesoftheSittingsoftheStandingCommitteeon Defence(2017-18)heldon15.02.2018,19.02.2018and 12.03.2018 .......................................................... 96 (i) COMPOSITIONOFTHESTANDINGCOMMITTEE ONDEFENCE(2017-18) MajGenBCKhanduri,AVSM(Retd)— Chairperson MEMBERS LokSabha 2. ShriDipakAdhikari(Dev) 3. ShriSureshCAngadi 4. ShriShrirangAppaBarne 5. ColSonaramChoudhary(Retd) 6. ShriThupstanChhewang 7. ShriHDDevegowda 8. ShriDharambirSingh 9. ShriJayadevGalla 10. ShriSherSinghGhubaya 11. ShriGauravGogoi 12. DrMurliManoharJoshi 13. KmShobhaKarandlaje 14. DrMrigankaMahato 15. ShriKalrajMishra 16. ShriParthaPratimRay 17. ShriAPJithenderReddy 18. ShriRodmalNagar 19. ShriBSenguttuvan 20. SmtMalaRajyaLakshmiShah 21. SmtPratyushaRajeshwariSingh RajyaSabha 22. ShriKRArjunan 23. ShriAUSinghDeo 24. ShriHarivansh 25. ShriMadhusudanMistry (iii) (iv) 26. ShriBasawarajPatil 27. ShriSanjayRaut 28. SmtAmbikaSoni 29. DrSubramanianSwamy # 30. ShriVivekKTankha* SECRETARIAT 1.SmtKalpanaSharma — JointSecretary 2.ShriT GChandrasekhar — Director 3.SmtJyochnamayiSinha — AdditionalDirector 4.ShriRahulSingh — UnderSecretary 5.ShriRajeshKumar — Sr.ExecutiveAssistant #Resigned w.e.f.07.03.2018. *Resigned w.e.f.16.11.2017. INTRODUCTION I,theChairpersonoftheStandingCommitteeonDefence (2017-18),havingbeenauthorisedbytheCommittee,presentthisForty ThirdReporton ‘DemandsforGrantsoftheMinistryofDefenceforthe year2018-19pertainingtoRevenueBudgetofOrdnanceFactories, DefenceResearchandDevelopmentOrganisation,DGQAandNCC (DemandNo.20) ’. 2.TheDemandsforGrantsoftheMinistryofDefencewerelaidon 9February,2018inLokSabha.TheCommitteetookevidenceofthe representativesoftheMinistryofDefenceon15and19February,2018. ThedraftReportwasconsideredandadoptedbytheCommitteeat theirSittingheldon12March,2018. 3.TheCommitteewishtoexpresstheirthankstotheofficersof theMinistryofDefenceandrepresentativesofthethreeServicesfor appearingbeforetheCommitteeandfurnishingthematerialand informationwhichtheCommitteedesiredinconnectionwithexamination oftheDemandsforGrants. 4.Forfacilityofreferenceandconvenience,Observations/ RecommendationsoftheCommitteehavebeenprintedinboldletters inPartIIoftheReport. NEWDELHI; MAJGENB CKHANDURI,AVSM(RETD), 12 March, 2018 Chairperson, 21 Phalguna, 1939 (Saka) StandingCommitteeonDefence. (v) REPORT CHAPTERI ORDNANCEFACTORYBOARD OrdnanceFactoriesareanintegratedbaseforindigenousproduction ofDefenceequipmentandammunitionandformthebackboneofthe country’sDefenceproduction.Defenceproductionisahighlyspecialized sector,fullofcomplexitiesandchallengeswhereproductshavetobe safe,reliable,consistentandcapableofoperatingundervaryingterrains aswellasclimatesandinextremeconditions.Accordingly,the technologiesapplied,whichcoverawidespectrumofengineering, metallurgy,chemical,textile,leather,opticaltechnologiesetc.haveto ensurehighqualityandproductivity,apartfrommeetingtheprimary objectiveofself-reliance.OrdnanceFactoriesalsofulfillcertain requirementsofParamilitaryandPoliceForcesforarms,ammunition, clothingandequipment.OrdnanceFactoriesendeavourtoenhancetheir capacityutilizationnotonlybysecuringordersfromtheDefenceforces butalsothroughsustainedeffortsindiversificationtonon-Defence customersandexports.However,priorityoftheOrdnanceFactoriesis indigenousproductionofDefenceproductsonly. 1.2Theyproduceawiderangeofarmsandammunitionsforthe Infantry,ArmouredCorps,Artillery,AirDefenceArtilleryandEngineer CorpsoftheArmy.OrdnanceFactoriesproduceammunitionforNavy andAirForceandhavetakenupindigenousdevelopmentofNaval armaments.Thefactoriesproducemilitarytransportvehicles,infantry combatvehicles,armouredvehicles,opticalandopto-electronic instruments,summerandwinteruniforms,parachutes,miscellaneous leathergoodsandgeneralstores.TosummarizetheroleofOrdnance FactoryBoardincludetoprovideadedicatedmanufacturingbasefor militaryhardware,indigenizationandTOTabsorption,maintenanceof ‘WarReserve’capacityand‘LifeCycle’supporttoarmsandammunition suppliedetc. 1.3TheOrdnanceFactoriesOrganizationisablendofoldand state-of-the-artfactories,withthefirstOrdnanceFactoryestablished in1801atCossipore,nearKolkata,andtwonewordnancefactoriesare comingupatNalandainBiharandKorwainUP.AtpresentOrdnance Factoriesmanage41manufacturingunitsand32otherestablishments. OrdnanceFactorieshavebeencontinuouslyupgradingtheir 2 infrastructure,withinductionofstate-of-arttechnologiestomeet futuristicrequirementsofusers. ‘41OrdnanceFactoriesaredividedinto5operatingdivisions,based onthemainproducts/technologiesemployed:— (i) Ammunition&Explosives—11Factories. (ii) Weaponsvehicles&Equipments—11Factories. (iii) Armouredvehicles—6Factories. (iv) Ordnanceequipment—5Factories. (v) Materials&components—8Factories. ’ Budgetaryprovisions ‘TheprojectionmadebyOFBandBEallocationforOFBfortheFY 2018-19areasfollows:— FinancialYear2018-19: (Rs.incrore) Army BE2018-19 BE2018-19 (Projection) (Allocation) Revenue 8,844.79 6,397.20 Capital 6,027.63 5,345.22 Total 14,872.42 11,742.42 (excld.GST) 1.4 OntheallocationoffundstovariousOrdnanceFactoriesand themethodologybeingadoptedfordistributionoffunds,theMinistry ofDefencestatedasunder:— ‘Followingbasisisadoptedforallocationoffundtofactories: (a) Targetofproduction&supplies (b) Projectionsoffactories (c) Pasttrendsandstatutoryobligations (d) Plannedinvestmentonmodernization Theallocatedfundtoafactoryisfurtherdistributedinvarious headsandfollowingmethodologyisadopted: (a) Pay&allowancesandrelatedexpenditurebasedonmanpower strengthandproductionactivitiesoffactory. 3 (b) Storesbasedonmaterialestimatesforthetargetof production,inventorystatus,committedliabilitiesandcarry forwardliabilitiesoffactory. (c) Otherexpenditurebasedonpasttrend,statutoryobligation, aswellaschangedrequirementfromtimetotime. (d) Expenditureoninvestmentonmodernizationisbasedon plannedprocurementofP&Moffactoryandestimatedcash flow’. BudgetforModernization 1.5TheMinistrywasaskedtofurnishthedetailsofthestepshave been/arebeingtakentomoderniseOrdnanceFactoriesacrossthecountry throughintroductionofstate-of-the-arttechnologies,theMinistryinits writtenreplyhasstatedasunder:— ‘ModernisationinOrdnanceFactoriesisacontinuousprocess.To keeppacewiththecontemporarymanufacturingtechnologies,OFB preparesalongtermplanningspreadoveraperiodof5years whichstartedfrom2007-08. Theapproachtowardsmodernisationisthreepronged: (a) Renewal&Replacement(RR)ofP&Mwhicharebeyond economicalrepair,withmachineriesofstateoftheart technologies. (b) AcquisitionsofP&MunderNewCapital(NC)foradditional capacity, (c) higherproductivity,enhancedquality,focusonuseof renewableenergyandtoaddressenvironmentalissuesetc. (d) CorrespondingCivilWorks(CW)infrastructuredevelopment. Thekeytechnologyintensiveareaswhichhavebeenidentifiedfor modernisationofOrdnancefactoriesare: (i) Chemicalprocessplants (ii) Smallarmsammunitionproduction (iii) Ammunitionfillingandassembly (iv) Foundryandextrusion (v) Metalforming,machiningandfabrication (vi) Qualitycontrolandassurance ’ 4 1.6TheMinistrywasaskedtofurnishthedetailsoftheoutlay providedandspentbyallOrdnanceFactoriesalongwithcomplete detailsofeachproject/programmeproposed,plannedandimplemented duringthelastfiveyears,theMinistryinitswrittenreplyhasstated asunder:— “ThedetailsoftheoutlayprovidedandspentbyallOrdnance Factories&detailsoftheproject/programmeproposed,planned andimplementedduringthelastfiveyearsgivenasbelow:— AnnexureI FundUtilisationduringLastFiveYearsonModernisation
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