The Indian government has pushed ahead with a new set of economic reform proposals aimed at jump starting the country's lagging economy.

The Cabinet on Thursday approved a measure to raise the limit on foreign investment in India's insurance sector from 26 to 49 percent. Federal ministers also agreed to allow foreign direct investment into the country's pension sector for the first time.

Indian Finance Minister P. Chidambaram announced Cabinet's approval of the measures and urged parliament to pass the reforms.

The ruling coalition, led by the Congress Party, is now in the minority in the legislative body, after one of its key allies pulled out to protest the economic reforms.

Trinamool Congress withdrew its support of the government last month after voicing strong opposition to a first set of reforms approved by the Cabinet last month.

Those measures, which did not have to get approval from parliament, include allowing foreign supermarket chains to set up shop in India, and opening up the aviation and broadcasting sectors to foreign investment. The government also increased diesel prices to combat the deficit.

Critics say the reforms will hurt India's small business owners and the poor.

The Cabinet on Thursday also proposed overhauling corporate regulations.

After the second set of reforms was announced, stocks on the Bombay Stock Exchange crossed 19,000 — the highest in 15 months. The Indian rupee rose to 52 — its strongest level against the dollar since April.