Showing no signs of succumbing under pressure from allies and the Opposition, Singh sought to reach out to the common man on a day the UPA's second largest constituent Trinamool Congress walked out on the government.
Apart from his annual addresses on Independence Day, this was the second time Singh spoke to the nation directly since the November 26, 2008 Mumbai terror attacks.
"At times, we need to say 'No' to the easy option and say 'Yes' to the difficult one. This happens to be one such occasion. The time has come for hard decisions," he said.
Referring four times to the 1991 crisis - when he was finance minister - and how the country came out of that situation, he said the current decisions had been taken to avoid a similar situation and restore investor confidence.
With the Congress managers confident of the numbers needed for the stability of the government, Singh sought to send a strong political message to all stakeholders and boost investor confidence.
He pointed out that the subsidy on petroleum products stood at Rs. 140,000 crore last year and it could have gone above Rs. 200,000 crore this year had the government not raised the prices.
"Where would the money for this have come from? Money does not grow on trees."
The BJP reacted sharply.
"Money does not grow on trees. But money grows in coal mines that they allocated to their friends. The fiscal deficit could have been addressed if money was charged for coal block allocations," party MP Piyush Goel said.
But asking the people to strengthen his hands, Singh warned them not to be misled by those who spread fear and false information.
"The same tactics were adopted in 1991. They did not succeed then. They will not succeed now."
PM's address: Part 1
PM's address: Part 2
PM's address: Part 3