Making a case for retaining the Armed Forces( Special Powers) Act amid calls for at least partial revocation of the law, Singh also said Intelligence reports have alluded to the presence of over 400 terrorists in the state, who are yet to be neutralised. He said any "let up" at this stage is likely to be exploited by terrorists.
The Army Chief felt that AFSPA should not be withdrawn as it is also a "strategic imperative" until the pullout of US troops from Afghanistan in 2014.
"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.
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"It is also a strategic imperative that we wait and watch the developments in Afghanistan post drawdown in 2014," he said.
US 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 Central Armed Police Forces," he said.