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Making the announcement in Lok Sabha as soon as it met for the first working day of the session, Singh said a formal motion for constitution of the Joint Parliamentary Committee would be moved soon.
"We could not succeed in spite of our sincere efforts" to persuade the Opposition not to insist on a JPC probe, Singh said.
Asserting that his government was committed to root out corruption, the Prime Minister said "all effective steps" were taken to convince the Opposition in this regard.
"We can ill afford a situation where Parliament is not allowed to function during the crucial Budget session. It is in these special circumstances that our government agrees to the setting up of a JPC," he said.
Singh requested Speaker Meira Kumar to proceed with the process of formation of the JPC and said a formal motion would be moved soon.
Welcoming the government`s move, Leader of the Opposition Sushma Swaraj thanked the Prime Minister and Leader of the House Pranab Mukherjee for the decision.
"We should not see this as a victory or defeat. This is a victory of democracy. We should all work together putting aside any talk of victory or defeat," she said.
