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Thursday, June 17, 2021

Ordnance Factory Privatization

 I do not believe privatization of Ordnance Factories (India's defence manufacturing units) will improve anything substantially. Keeping arms manufacturing under the government control might be as good or as bad as keeping it under private. I wrote a lengthy comment on a magazine's article. I am cut-pasting the same here for posterity.

There is no free market of arms and ammunitions on this planet. Neither there should be. So Ordnance Factory Manufacturing will never be under the classical dynamics of free-market demand and supply. Howsoever 'corporatization' may be there.

The customer of OFB (in its current or 'corporatized' avatar) will always be only 1. The army/navy/airforce. The fountainhead of corruption in most nations and civilizations has been defence procurement. That is not going to go away any time soon.

Hence I do not jump with joy at the prospect of OFB corporatization, even though I am a free market fanatic. All the partnerships (foreign and domestic) will lead to more innovative 'sales and persuasion technique'. There cannot be a market when there is only one customer. Hence there never will be any market incentive to improve the quality of arms & ammunition. Arms & ammunition manufacture is one of those industries where a few top officials' patriotism/ethics/morals will be the only quality driver. That is how it has been till now. That is how it will continue to be. Corporatization or not.

Disclaimer: I grew up in an OFB colony. So yes, I am biased about this topic. I admit that I have seen lots of freeloaders, work-shirkers, corrupt OFB employees. But I am proud to say that I had seen some brilliant, insane, genius workers who pull the factories through despite all the pull-back and pathetic (by today's standards) salaries.

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