Mumbai: Former Reserve Bank of India Governor Raghuram Rajan emphasized that India cannot be in lockdown for long, and will have to focus on livelihood along with lives.India extended a nationwide 21-day lockdown to May 3 from April 14 earlier in an effort to contain the spread of the coronavirus pandemic in the country; a move which is likely to hurt economic growth heavily and also risk the livelihood of many in the country.“(India) can’t be in lockdown forever; we have to focus on both lives and livelihoods,” Rajan, who had predicted the global financial crisis of 2008 three years in advance, said on ET Now."I am more pessimistic; there will be a huge challenge for India to get back,” warned Rajan.Earlier in the day, Christopher Wood, global head of equity strategy at Jefferies, also warned that coronavirus pandemic-induced lockdown in countries such as India with young demographics causes more human suffering than Covid-19 itself.Wood had criticized India for providing much less in the way of fiscal support than many other countries.“All of the above leaves the continuing impression mentioned here previously, that the second Modi government, re-elected for a five-year term last May, cares more about the social agenda than the economic one,” Wood had said.Rajan said the government has to think about a staggered restart to the economy , and first focus should be on protecting the health of the real economyHe warned one has to be careful about the fiscal packages, and has to make sure they do not shake currency and hike interest rates. He said the government has to be very careful while structuring the scheme.However, he asserted that one needs to ensure that everyone is fed in India, and the government must ensure medical facilities are well-equipped.“It is not very expensive to ensure that all the poor are fed,” he said.“Fiscal deficit numbers are going to look ugly no matter whatever you do,” he said, adding that the government should also signal they will go back to fiscal discipline in the medium term.Rajan warned that some small and medium enterprises are already fragile and won't be able to survive.“One also has to look at vulnerable firms and make sure they survive and reopen,” he said adding that the first focus should be on protecting the real economy and not the fiscal deficit.He said the government needed to have a priority list and do what is “necessary”.Rajan stressed that the government has to focus on protecting valuable small and medium enterprises (SMEs). He also hoped there would be less pink slips, and companies will retain employees even if it were at moderate wages.He pointed that RBI will have to eventually borrow from the market, and the banking system will be risk averse and won’t lend.Banks’ parking of funds with the RBI are close to record highs with them putting in over Rs 7 lakh crore daily in reverse repo, reflecting the risk aversion among banks even as the regulator is nudging them to lend.Lenders are comfortable keeping funds at the safest possible option even though the returns are meager compared with what they might have earned from lending to corporates.Rajan said RBI cannot lend directly, but can force banks to lend to certain sectors.He believes India may see deflationary scenario rather than an inflationary scenario due to Covid-19, and inflation targeting in India will not be a constraint.Supply cuts that Opec+ are willing to make are quite small, and oil prices will be relatively depressed for a while given the slow growth recovery.“Oil prices are a windfall for us, no matter how you see it,” said Rajan.He stressed fiscal institutions must be strengthened in order to maintain investor confidence.He pointed that there is a general deterioration in coordination of global leadership, and the upcoming US Presidential elections will be the most important event of the decade.