Indian Prime Minister Manmohan Singh defended a string of economic reforms unveiled by his government, despite protests over higher fuel prices and new foreign investment rules.
Singh, speaking to ministers and advisers in New Delhi on Saturday, said the reforms were needed to revive flagging economic growth, improve the investment climate and boost public finances.
"The recent increase in diesel prices is an important step in the right direction," he said, following a decision on Thursday to hike the heavily subsidised price of the fuel by 12 percent.
Truckers unions have since threatened to go on strike and there were protests on Friday over the halving of the number of subsidised cooking gas cylinders available to households per year.
On Friday, the cabinet also cleared highly contentious new rules inviting foreign supermarkets into the Indian retail sector and allowing foreign airlines to take stakes in domestic carriers.
"To achieve the target of 8.2 percent growth (contained in a new five-year economic plan), we need to revive investment in the economy. The investment environment is therefore critical," Singh said.
India was dependent on inflows of foreign capital because of imbalances in its spending and consumption patterns, the under-fire 79-year-old explained.
The Trinamool Congress party, a regional partner in Singh's multi-party coalition, warned it would hold a street rally in its power base of West Bengal on Saturday to press its demand for a roll-back of the changes.
"We will take to the streets today to protest the hike in diesel prices as well as the government's decision to ration liquefied petroleum gas," Trinamool party secretary Mukul Roy, who is also India's railways minister, told AFP in Kolkata.
Indian newspapers broadly hailed the "rush of reforms" unveiled by Singh's government.
His beleaguered administration, widely criticised for its ponderous and timid decision-making, had opened the "reform floodgates", according to a headline in the Mail Today tabloid.
"From Paralysis to Rush of Reforms", read the front-page of The Times of India, the most widely circulated English-language daily, while editorials in The Hindu newspaper said the government was "going for broke".