He also said that every university should have police personnel on the campus, and Jawharlal Nehru University (JNU), which is in news for a recent incident of violence, should be "closed for two years".
"The economy is in dire times, everything is going downwards, if the trend continues banks will close down, NBFCs will close down and (it will) lead to disaster," Swamy said, speaking to reporters here.
He was speaking on the sidelines of a programme at Indus University.
"The measures that can be taken are...first Income Tax needs to be abolished. The tax terrorism in our country needs to be reined in so that people start investing and do not fear taxman," he said.
"The problem we are facing at present is lack of demand, we have good supply. So the government needs to print notes and put it in the hands of people to boost demand.
Government needs to build roads, big six-lane, eight-lane roads," he added.
Asked about the recent violence at JNU in Delhi, Swamy said for the safety of students, every university should have police presence on the campus as in the United States.
"In universities like JNU we should have not only police but CRPF and BSF too," he said.
JNU should be closed for two years and its "good students" should be shifted to other universities like Delhi University, the MP, known for making controversial statements, added.