For the third step, he recommends "institutional autonomy and processes" for fixing the country's financial sector.
Dr Singh said, "deep and prolonged economic slowdown" was "inevitable", however, "I do not want to use words like 'depression' in a cavalier fashion," he added.
"This economic slowdown is caused by a humanitarian crisis. It is important to view this from the prism of sentiments in our society than mere economic numbers and methods," he said.
Regarding the consensus now formed among economists about an economic contraction, the ex PM said, "which if it happens, will be the first time in independent India." He, however, hopes the consensus is wrong.
Dr Singh believes the coronavirus-induced nationwide lockdown announced in March was in line with what other countries were doing. He said,"perhaps a lockdown at that stage was an inevitable choice."
"But the government's shock and awe approach to the lockdown has caused tremendous pain to people. The suddenness of the announcement and the stringency of the lockdown were thoughtless and insensitive," he added. "Public health emergencies such as this are best dealt with locally by local administrators and public health officials, with broad guidelines from the Centre. Perhaps, we should have devolved the Covid-19
battle to the state and local administrations much sooner."
As the debate on how to revive the economy rages on, Dr Singh says "higher borrowing is inevitable." While this can impact India's debt to GDP ratio, he said, "(if it) can save lives, borders, restore livelihoods and boost economic growth, then it's worth it."
"India's track record as a borrower from multilateral institutions is impeccable, It is not a sign of weakness to borrow from these institutions," he added.
The former Finance Minister, who famously helmed the reforms of the 1990s, also warned against protectionism - imposing high import duties. He reminded that India's trade policy over the last three decades brought "enormous economic gains to not just the top but across all sections of our population."
"The previous crises were macroeconomic crises for which there were proven economic tools. Now we have an economic crisis caused by an epidemic which has induced fear and uncertainty in society, and monetary policy as an economic tool to counter this crisis is proving to be blunt," he added.