The Army chief said one will have to "wait and watch" if Pakistan Army has had a change of heart since the gruesome attack on an Army school in Peshawar last month that drew condemnation in India.
He also said that Indian security forces are carefully watching the situation in Afghanistan and its possible spill over into India.
"Threats and challenges have been growing, both in intensity as well as commitment, because of active borders that we have," Singh said addressing his annual press conference.
Talking about the security situation in militancy-hit Jammu and Kashmir, the Army chief said, "Pakistan is supporting proxy war in Jammu and Kashmir despite suffering casualties within their country".
He was referring to the recent casualties that the Pakistan Army had at the hands of Taliban militants.
Singh lauded the Army and other security forces for ensuring a safe environment to voters in Jammu and Kashmir which saw a high turnout in the recent Assembly election.
"People were confident of coming out to vote. Army and other security forces worked tirelessly not for weeks but months," he said.
The Army chief pointed out that 2014 saw the highest number of terrorists being neutralised in the state in recent years and put the figure at 110, out of which 104 were killed by the force.
Last year, 65 terrorists were killed. Singh said the high figure showed the effectiveness of the counter insurgency grid that the Army has set up in the state.
Singh said the recent attacks against the Army in Jammu and Kashmir showed the "desperation" of terrorists.
"The recent strikes by the terrorists not only reflect their desperation but are also a grim reminder that the terrorist infrastructure in Pakistan is intact," he said.
Talking about the rise in ceasefire violations, he said that the action has slowly moved to the International Border and not the LoC.
"That is probably, likely to be because of our counter infiltration grid is stronger on LoC," he said, adding that measures like 'obstacle systems' are making it difficult for the terrorists to infiltrate.
He admitted that there are areas, like open drains and streams, that are susceptible to infiltration attempts at the International Border.
Asked about the perception that Army commanders are not being given a free hand in operations, Singh strongly denied it.
"The commanders have a free hand to operate. I have given full freedom as far as operation is concerned. On the LoC, they have a free hand to retaliate to Pakistan firing in a manner that they feel is appropriate," the Army chief said.
However, he underlined that the Army has a "zero-tolerance" approach to human rights violations.
Talking about the situation in Afghanistan, Singh said the "spillover effect is being watched carefully".
He said the situation in Afghanistan has definitely improved to the extent that the US feels that they can leave the country to the Afghan national army to take care of the security situation.
"But definitely, the draw-down is likely to have its own effect. That cannot be ruled out. And we have to be prepared for it.
"Terrorist network can extend from Afghanistan to our side and J&K is one area where the effect could be felt. We are aware of this possibility and because of this we are keeping a careful watch," he said.
The Army Chief added that his force has a good tier system of counter infiltration grid.
"As and when we feel it needs to be further enhanced, we will definitely do that," he said.
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