In a rare televised address to the nation, he insisted that the concerns over allowing FDI in retail were "baseless" as there is enough scope for big and small retailers to grow.
Noting that fears had been created in 1991 when he as Finance Minister had initiated economic reforms, Singh said those behind the scare "did not succeed then" and "they will not succeed now".
He justified the hike in diesel price and cap of six cylinders on subsidised LPG, saying these were required in the difficult economic situation and to avoid an increase in fiscal deficit that would lead to a steep rise in cost of essential commodities.
"No government likes to impose burdens on the common man... At the same time, it is the responsibility of the government to defend the national interest and protect the long term future of our people," Singh said.
"We have much to do to protect the interests of our 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, adding, "for this, I need your trust, your understanding and your cooperation."
He recalled that the last time the nation faced this problem was in 1991. "Nobody was willing to lend us even small amounts of money then. We came out of that crisis by taking strong, resolute steps. You can see the positive results of those steps," he said.
"We are not in that situation today, but we must act before people lose confidence in our economy," Singh said.
Underlining that the government was at a "point where we can reverse the slowdown in our growth", he said, "We need a revival in investor confidence domestically and globally. The decisions we have taken recently are necessary for this purpose".
He made the 15-minute address to the nation in Hindi and English against the backdrop of uproar over the recent decisions to allow FDI in multi-brand retail, Rs 5 increase in diesel price and cap on subsidised LPG cylinders.
A tough-talking Prime Minister said, "money doesn't grow on trees. If we had not acted, it would have meant a higher fiscal deficit."
He told the nation that he would do "everything necessary" to put the country back on the path of high and inclusive growth.
"But I need your support. Please do not be misled by those who want to confuse you by spreading fear and false information," Singh appealed to the countrymen, adding he had full faith in their wisdom.
"As Prime Minister of this great country, I appeal to each one of you to strengthen my hands so that we can take our country forward and build a better and more prosperous future for ourselves and for the generations to come," he said.
Contending that his government has been voted to office twice to protect the interests of the 'aam admi', the Prime Minister said, "we must ensure that the economy grows rapidly" which would generate enough productive jobs for the youth of our country.
"Rapid growth is also necessary to raise the revenues we need to finance our programmes in education, health care, housing and rural employment," he said.
While justifying the hard decisions of the government, Singh referred to the "great difficulty" being encountered by the world economy with even the US and Europe struggling to deal with an economic slowdown and financial crisis. Even China is slowing down, he said.
"We too have been affected, though I believe we have been able to limit the effect of the global crisis," Singh said.