Union Home Minister P Chidambaram on Saturday said India is not facing recession but only a slowdown.

Delivering a lecture after launching the Bharatiya Yuva Shakthi Trust here, he said manufacturing was facing a sharper slowdown. "We have to take counter-(measures) and sometimes corrective measures to ensure high domestic demand. While the government is taking fiscal measures, the RBI (Reserve Bank of India [Get Quote]) is taking monetary measures," the home minister said.

Stating that there was some "monetary shock" due to the drying up of overseas as well as non-banking lending, Chidambaram said the public sector banks handled the larger portion of loans.

"We have to increase lending to stimulate domestic demand," he said, adding the government and RBI can and will work together to work out more stimulus packages.