Spending must come...

Expectations play a crucial role in propelling spending in the economy which is all the important to distinguish between the periods of boom and busts, during booms spending increase and in busts spending goes down leading to recession, spending is one special factor that decides how fast an economy is growing and creating job oppourtunities, a low spending scenario demand policies that increase private spending, consumption and investment, through monetary, fiscal and international policies, though economists favour fiscal spending better to counter cyclical deficit-surplus spending in the economy to strike a balance between prices and unemployment while achieving the potential growth rate. The growth of economy and the expectations about it has a significant effect on the spending of the economy, the expected growth rate often based on the current data and policies and would be policies has considerable influence on the spending decisions, basically investment. However, the spending constitutes spending from all sides, the consumption spending, the private sector or investment spending and the public spending, the monetary policy tries to incentive them through money supply and interest rate and expectations and full employment and wage or income and expectations while maintaining price stability. The inflation reduces demand and spending and disinflation or deflation increase spending through interest rate and real wage or income and expectations, a lower price level would increase interest rate cut and rate cut expectations and increase investment and higher real wages or incomes and expectations would increase consumption spending, guided by higher growth and growth expectations. Lower price and price expectation are important to form expectations about interest rate and wages which, as have been said before, increases investment and consumption spending and growth with less pressure on the public spending and interest rate, however in developing economies like INDIA there is a need to increase infrastructure and basic facilities like power to crowd in private investment and increase employment when the private sector is waiting for the demand to revive with consumption spending due to higher wage or incomes and expectations, the government in INDIA has pledged to double farmers income, increase minimum wages and has implemented the 7^th Pay Commission, nonetheless the real GDP has seen a reduction from the mid 2016 which has been further lowered by Demo and uncertainty created by GST. However, spending must come either in the form of consumption and investment, or both, to arrest falling growth and growth expectations. China has grown for thirty long years by projecting a higher warranted growth rate and expectations on the back of its huge population, but now receding, INDIA too has the same advantage and could grow at higher rates if everybody is gainfully employed with the right spending.     .