In his address to the nation, Singh said the government had run up a huge subsidy bill of Rs 1.40 lakh crore on petroleum products last year.
"If we had not acted, it would have been over Rs two lakh crore this year," he said.
Singh recalled the financial crisis of 1991 when nobody was ready to lend India even small amounts of money.
"I am determined to see that India will not be pushed into that situation," the Prime Minister said.
