Savings or spending, what do they want?

The economy needs to grow at a very high rate, if we are to provide jobs for everybody and reduce poverty. On that there is no debate. But there is no clarity on what we, the people, are supposed to do. We are told that people need to save more to finance growth. If people save money in banks then banks will have more money to lend, which will bring down interest rates. It will be even better if we buy shares as that is the cheapest way for companies to raise money, because they will pay dividend only if they make profits, whereas they have to pay interest on money borrowed from banks, even if they are making losses. Easy to follow. What is household savings? It is disposable income (which is salary+dividends+interest-taxes), plus savings towards pensions, minus expenses. Our disposable income is low because our government does not pay us any state pension for all the income tax we have paid. Not only that, it taxes pensions almost as heavily as it taxes salaries of younger people. India ranks at number 71 in a list of countries best for old age, below Nepal at 70, Bangladesh at 67 and Sri Lanka at 46. Naturally, people with high disposable incomes are able to save more but, on the other hand, if their asset prices are very high they tend to spend more, which is known as 'wealth effect'. Gross financial savings as a percentage of GDP are the lowest in 25 years. People cannot save if their spending is high, because of high prices. Actually, wholesale prices have been falling for one year. Retail prices are increasing but at much lower rates, prompting the RBI to cut interest rate by 125 basis points. Curiously, people expect prices to rise by over 10% in the next 3 months to one year. If people are expecting inflation to be higher than interest paid by banks it is only natural that they would be reluctant to save in term deposits at banks. The Governor of the RBI has repeatedly said that he intends to keep real interest rate, which is the difference between actual interest rate and retail inflation, at 150-200 basis points but people seem to think otherwise. It maybe because they were savaged by scorching inflation during the Congress years. And if they do not trust the RBI they will invest in physical assets, such as real estate or gold, to hedge against inflation. To prevent that the government is selling gold bonds which will pay interest at 2.75%. What about shares? Seems that promoters of companies are pledging their shares with banks to service their debts. The danger in that is that if share prices fall banks will want more shares as collateral or sell off some shares to reduce their exposure. Selling shares in a depressed market will cause prices to fall even further. On the other hand, if people save more they will spend less which will depress profits by cutting demand. So what will help the economy, increased saving or increased consumption? Will someone explain?