Cost Minimizing Policy for Industry

Industry is the backbone of any economy, our local industry is now-a-days suffering by high costs problem. Core reasons behind this problem are high petrol, gas and electricity prices, which are input cost for majority of industry. Due to this production costs are very higher and hence their products are very expensive as compare to international market. This not only affects their sales but also increases the price level which act as catalyst for cost-push inflation. This also discourages foreign investment especially in industrial sector because when input costs are higher not firm would like to enter in the market because it may possible that that unable to recover the costs.

So, we need to focus on cost minimizing policy of particular industry i.e. how a firm in an industry can minimize its costs and how Government can give them certain incentives to SME and MNCs so that both domestic and foreign investors can be encouraged. This can be done by doing research in every industry and by giving them a particular policy. Although it would be expensive; but it will be beneficial in long run for economy. It will not only decrease the inflation but also decrease the unemployment, so as a result overall economy will improve.