COST ACCOUNTING RECORD RULES...GOVT FAILS TO IDENTIFY.

Rising CAD is a big trouble for the Indian economy which is standing at the brink of getting negative ratings on its sovereign. From prime ministers economic council to every economist of the country has been trying to figure out the way for reducing the cad and getting India back on the track of FRBM.

Rising consumption of Gold and international crude prices are being tagged as the prodigal son behind the rising CAD. But the story stands out to be different when finding out the real reason behind the CAD. But it is being found that Government of India despite of having a professional solely designed for cost control and cost management that is COST ACCOUNTING and ITS COST ACCOUNTING RECORD RULES are not being given the proper justification. In the past several years it has been found that cost accountants are treated very poorly and this the prime reason behind current economic condition of India. The profession and its members who have dedication towards cost management are not being treated at par with Accountants.  They have been often removed from various position and their prime operational areas over the last couple of years and this is still being continued. The government of India fails to identify the value of cost management where as today cost accounting and cost management are an integral part of the decision making in countries like UK,US, CHINA and many other countries economic policy frame work. Indian government simply ignores the value of the profession here.

Government has ignored the real reasons behind the rising cad which has also lead to an unbalanced industrial growth. According to the Cost Accounting Record Rules (Break up of cost of Input Materials imported during the year) of the same states that when an manufacturing unit consumes imported goods and the same data is being compiled to analyzed to find the same availability of the material domestically. Economists around India have not turned to this data till data otherwise they must have got the solution of the rising CAD as well as development of those areas where imported goods are being consumed by the manufacturing units. Cost Accounting Record rules helps the governments and the Indian economy to have better understanding about the cost implication and it acts likes an barometer for measuring the cost. Today the Indian economy is struggling to get a GDP growth of8% followed with substantial growth in inflation.

We all know that India is now a global assembling hub which means that imported goods which are assembled and sold India. In the recent last 5 months of this year 2013 international commodity prices have come down which has given immense opportunity to the manufacturing units of India to built inventory of raw materials available at cheap valuation below the average normal prices. In my research I find that CAD is going to increase further since government has failed to the Cost Audit Report. We cost accountants have been neglected by the government for several decades but I find its high time that government should utilize the cost accounting profession to resolve the CAD issue. We are not being given the at PAR status of Accountants and have been neglected over a couple of years. Today the ministry of finance and RBI is struggling to get avenues for reducing the CAD and getting Indian economy in the path of 8% GDP growth. Cost Accounting record rules are of great help and the same is not being used properly by the Government of India.

Cost Audit Report & Cost Accounting Record Rules is huge beneficial to the government of India since through this report they can make those industries more competitive matching with the imported material. Coal is being one of such raw material which is being consumed through import. Government fails to understand that if the same coal is being made available domestically then it will not only reduce the CAD but bring employment and other ancillary growth of different industries.

If Cost Audit Report is being utilized ten one can block the loopholes of misusing the import segment as well as one can find the scope of development of the indigenous industries compared to the imported ones. Cost Audit Report and Record rules serves an important role in various aspects where government of India can get lots of help for designing the economic growth of 8%+. The profession of cost accounting can be of great help for the Prime Minister Economic council.  
Written By Indraneel Kripabindu Sen Gupta