In an Army Day interview to Defence Ministry's 'Sainik Samachar' magazine, Singh said that even a partial withdrawal of AFSPA, at this juncture was "likely to prove detrimental to the counter-terrorist campaign being conducted under the aegis of the Unified Command headquarters in the state".
"Intelligence reports allude to the presence of over 400 terrorists in the state, who are yet to be neutralised. The terror infrastructure across the LoC is intact and has the potential to vitiate the security environment in the state.
"Any let up at this stage, therefore, is likely to be exploited by terrorists and other inimical elements to their advantage," Singh said.
He noted that the AFSPA was an enabling act which provided the requisite legal safeguards for the carrying out of effective counter-terrorist operations.
"It is also a strategic imperative that we wait and watch the developments in Afghanistan post drawdown in 2014," he said.
United States troops are pulling out of the AfPak region in 2014 and India fears that the development would lead to the terrorists engaged there spreading to other parts of the region.
On the terror situation in the strife-torn state, Singh said the scenario was under control and infiltration levels had been brought down.
"From 1,852 terrorists that infiltrated in 2001, the number in 2013 is 90, which is owing to the efficacy of the dynamic, multi-layered counter-infiltration grid and relentless operations by Army along with the state police and the central armed police forces," he said.
On the raising of the new Mountain Strike Corps in the northeast, he said the process had already begun and the headquarters of one Infantry Division and two Infantry Brigades will commence on January 1, 2014.
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