A day after the Trinamool Congress pulled out of the United Progressive Alliance over the issues, the dominant Congress asked the states run by the party to raise the quota of subsidised cooking gas cylinders from six to nine.
"Sonia Gandhi has asked Congress chief ministers that now the government's decision of subsidising six cylinders should be increased to nine. Now nine cylinders will be given at subsidised prices," ppokesperson Janardan Dwivedi told reporters here.
Congress-ruled Delhi has already announced it will give three more cylinders, under kerosene-free Delhi project, to some 3.5 lakh poor families.
Speculation about a negotiated settlement also swirled during the day that the government may tinker with the diesel price to assuage people's feelings.
On the most politically contentious decision on allowing foreign investment in multi-brand retail, the Tuesday clarified that it is up to the states to implement the decision. It said FDI policy is not covered by the bilateral investment pacts (BIPA) the country has signed with some 80 countries.
The main opposition Bharatiya Janata Party had said the government cannot leave the decision on FDI in retail on
states as it was bound by the bilateral pacts.
Opposition parties, especially the Left, however, said the government cannot take the decision as it lacked the requisite popular mandate as evidenced by Trinamool Congress's opposition and eventual pull-out.
The opposition parties have called a nationwide strike Thursday protesting against the government's decisions last week to hike diesel prices, cap the subsidised cylinders for every family and allow foreign direct investments in multi-brand retail and aviation sectors.
But the government found a strong ally in the Indian industry which urged the government not to withdraw the reform measures saying it would "send a signal that the government is not capable of taking decisions."
Industry leaders also political parties to reconsider their decision to go for the strike as it would cause huge losses to the economy.
"FICCI urges all parties to reconsider such proposed actions as these will result not only in national losses which the nation can ill-afford, but also directly affect mainly the poorer sections of society and daily wage earners," said R V Kanoria, president of the industry chamber.
Anand Mahindra, chairman of Mahindra & Mahindra, also urged the government to remain firm on the reform process.
"We urge the Government to stand its ground. Right-thinking Indians will be less than amused by partisan politics in a fragile economy," Mahindra said.
Biocon Chairperson Kiran Mazumdar Shaw said "Good economics does not make for good politics. The poverty card suits political agendas. Vote banks remain solid if the poor remain poor."
"We need clean and progressive politicians. No doubt Mamata (Mamata Banerjee) is spotlessly clean but she is not progressive," Shaw said on micro-blogging site Twitter.