In a turbulent time Pakistan is in, the Competition Commission of Pakistan's (CCP's) recommendation to Securities and Exchange Commission of Pakistan (SECP) to meaningfully proceed with the cost audit going in cement, sugar, ghee/oil, fertilizer and wheat flour industries is a step in the right direction.
Not only does a cost audit report on what the cost has been, it also brings out wastage, shortcomings, lapses, inefficiencies in the working of entities. Be they in the operational mechanism, ministerial functioning, procurement, production or marketing by way of comparative studies and operational research, it brings to light deficiencies in procurement of the inputs.
Conspicuously omitted in the recommended list of industries for cost audit, however, is 'textiles'.
Textiles is the premier industry of Pakistan which extends its influence to almost everything. If affects industrial culture, extending to the mode of business operations and stretching to governmental budgeting and overall functioning.
There is already concern as regards poor quality and low yield of our cotton. To link the sowing of seeds for cotton cultivation to the final product is again a point to be paid attention to. Here also the principle of cost to output ratio makes greater sense. Cost audit of cotton culture, right from the selection of seeds for the sort of cotton output desired, depending on the quality desired for the final produce viz. yarn or cloth, is an area which needs to be gone into.
Textiles, including man-made fiber and yarn, therefore, needs to be added to the list of industries recommended for cost audit by the Competition Commission of Pakistan (CCP).
Since growing cotton does not form part of industrial activity, to which the Company Law is not extended, there is a need to frame cost audit rules for agricultural produce, especially cotton, in addition to existing framework of SECP.
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