Seeking trust and understanding of the people in a televised address to the nation, he asked them not to be misled by those who want to confuse them by spreading fear and false information like they did unsuccessfully in 1991.
Speaking against the backdrop of Trinamool Congress withdrawing support to the government on FDI and diesel price hike and the opposition from other parties, Singh said, "we have much to do to protect the interest of the nation and we must do it now.
"At times, we need to say 'no' to the easy option and say 'yes' to the more difficult one. This happens to be one such occasion. The time has come for hard decisions," he said.
"For this, I need your trust, your understanding and your cooperation," he said justifying the Rs.Five hike in diesel price, cut in sup-ply of subsidised LPG cylinders and allowing FDI in multi-brand retail.
Referring to the ballooning oil subsidy which would have touched Rs two lakh crore this year, up by Rs.60,000 crore last year, he asked where would the money for this have come from.
"Money does not grow on trees. If we had not acted, it would have meant a higher fiscal deficit. That is an unsustainable increase in government expenditure vis-a-vis government income," he said.
Painting a grim picture, Singh said if unchecked this would lead to a further steep increase in prices and loss of confidence in economy.
The prices of essential commodities would rise further. Both domestic as well as foreign investors would be reluctant to invest in our economy. Interest rates would rise, our companies woiuld not be able to borrow abroad and unemployment would increase, he said.
Drawing comparisons with the 1991 situation when he unleashed a wave of reforms, he said nobody was willing to lend even small amounts of money then.
"We came out of that crisis by taking strong, resolute steps. Your can see the positive results of those steps. We are not in that situation today, but we must act before people lose confidence in our economy," he said.(MORE)
