Speaking at the Chief Ministers` Conference on internal security, Modi said, "it is unfortunate that the present Union Government has failed to instill faith and confidence about our defence preparedness in the common man".
Modi said the internal security of the country cannot be viewed in isolation as it is intertwined with the external security scenario and the armed forces play an important role in anti-infiltration and anti-insurgency which directly impinges on the internal security of the nation.
"In this context, any lacunae in our defence capabilities on account of resource constraints, demoralisation of the rank and file and tensions between the civil and military wings is bound to have an adverse impact on the Internal Security of the Nation," he said.
The chief minister said the centre should take proactive steps "to clear the fog of mistrust and suspicion" that has arisen on account of the "recent unseemly controversy" and not "remain content with mere issuance of statements".
Criticising the centre for its "non-consultative" approach with state governments on key security issues, Modi said the centre was creating "state within state" by amending RPF Act, BSF Act which take away powers from state police and meddling with subjects under the state list.
He said politicisation of central agencies, including the CBI, is increasing and they are used to harass and victimise political rivals of the ruling party at the centre.
"This approach has gravely compromised the credibility of agencies like CBI and is a matter of concern since these agencies are also involved in internal security matters," he said. .
Modi questioned the claims made by the centre that 97 per cent of intelligence inputs are being generated by central agencies and only three per cent of Multi-Agency Centre inputs come from state agencies, which in turn take commensurate responsibility of information they disseminate.
He said the such statements would only serve to belittle the efforts of numerous state personnel who are foot soldiers for homeland security.
"I would strongly urge that a panel of experts should review the parameters for arriving at such figures. The review should culminate in a comprehensive White Paper that will look at the modalities of intelligence gathering and sharing and lay down appropriate norms," he said.
Modi said the centre is meting out "injustice" to young aspirants through its "callous approach" in the matter of Limited Competitive Examination, which seeks to address severe shortfalls in the IPS cadre by inducting officers of the Armed and Para military forces.
"It is noteworthy that the Union Government has even disregarded the advice of a constitutional body like the UPSC on this issue," he said advocating a systematic increase in the annual intake of IPS officers rather than resorting to ad hoc arrangements.
Modi reiterated his earlier call to set up an all India Intelligence Service on the lines of All India Services to upgrade the quality of our intelligence wings.
The Chief Minister pointed out that Government of India should not ignore states which are peaceful and currently not affected by the menace of Naxalism. He said centre has no proactive strategy for safeguarding vulnerable off shore installations like Single Point Moorings.
Modi said inspite of being assured on locating a regional hub of National Security Guards (NSG) in Gujarat during the Chief Ministers conference in 2009, no such centre has been set up in the state even after three year.