Due to growth in the economy (and rising incomes), a large number of products and services have become affordable
to people. This, in turn, has lead to a massive increase in consumption. As a result of capacity increases and freer imports, expanding supply has been the main driver of the economy.
The author says that as volumes increase, processes will become more efficient, and the cost of production will decline. The pressure of competition also helps to keep prices in check. This is true of both the manufacturing sector and the retail sector.
But the author warns that in a situation where supply is constrained by (government) regulations, the prices will continue to rise…The problem is that in certain core areas the government still has a monopoly in providing services – but it lacks the necessary resources for delivering them! An example of this skewed mentality, says the author, is the sight of people standing in long lines for drinking water; while chatting on their cellphones!
Investments in infrastructure can only help to remove these bottlenecks, but cannot be a substitute for the forces of demand and supply.