Air Marshal Birender Singh Dhanoa also took charge as the 25th Air Force Chief replacing Anup Raha.
Gen Rawat superseded two senior most Lt Generals, Praveen Bakshi and P M Hariz.
Lt Gen Bakshi, who heads the Kolkata-headquartered Eastern Command, announced "full support" to the new chief and told theatre officers through video conferencing he will continue to lead with "full professional sincerity as hither-to-fore".
"I convey my best wishes and full support of Eastern Command to Gen Bipin Rawat on having taken over as the Chief of Army Staff," he said.
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He requested that speculation and trolling in media and social media should stop and everyone should focus on contributing their best to the betterment of the army and the nation.
The Eastern Commander called the new Army chief to congratulate him on taking over the reins of the army.
Speculation is rife that Lt Gen Bakshi may be given the new post of Chief of Defence Staff pertaining which Parrikar will meet Prime Minster Narendra Modi next month.
Gen Suhag, who superannuated today, said army is prepared to meet any challenge as he thanked the government for "providing a free hand" and implementing the One Rank One Pension scheme.
He said that infiltration bids had increased during the year and the number of terrorists killed was nearly double the previous year.
The General said the army focused on operational preparedness during his tenure.
Suhag said that when he had taken over he had asserted the response of the army to any action against our interest would be immediate, adequate and intense. "Indian Army has done that in the last two-and-a-half years," he said.
Earlier in the day, Gen Suhag and Air Chief Marshal Raha paid tributes at Amar Jawan Jyoti and inspected the guard of honour.
The new IAF chief, Air Marshal Dhanoa, had developed the country's aerial targeting philosophy against potential adversaries and transformed the concept of air operations of the air force into contemporary war fighting practices.
The Air Marshal has many feathers in his hat. As the
During the conflict, under his leadership and supervision, the squadron devised unique and innovative methods of bombing at night at altitudes never before attempted in the history of air warfare, the IAF said.
Prior to the attack, the squadron had been adjudged as the best fighter squadron of western Air Command for its high degree of professionalism and peace-time training. After the conflict, it emerged as the most decorated IAF unit of Kargil War.
Gen Rawat has vast experience in high altitude warfare and counter-insurgency operations.
He commanded an infantry battalion, along the Line of Actual Control in the Eastern Sector, a Rashtriya Rifles Sector and an Infantry Division in the Kashmir Valley, a Corps in the Eastern theatre and the Southern Command.
He has tenanted instructional appointments at Indian Military Academy and at Army War College, Mhow.
Gen Rawat has held important staff appointments at Directorate General of Military Operations and Military Secretary's Branch at Army HQ.
The General commanded a Multinational Brigade in a Chapter VII mission in the Democratic Republic of Congo (MONUC). While serving with the United Nations, he was twice awarded the Force Commander's Commendation.
An alumni of Defence Services Staff College, Wellington, he has been awarded various medals of high honour for gallantry and distinguished service in a span of over 38 years in uniform.
He also attended the Command and General Staff College (CGSC) course at Fort Leavenworth, Kansas, USA.
Academically inclined, Rawat has authored numerous articles on national security and leadership, which have been published in various journals and publications.
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Meanwhile, sources said that during his address, Lt Gen Bakshi said he understands that it is the government's prerogative to select the army chief.
He said promotion should be based both on seniority and merit and that he had endorsed it at Army Commanders conference.
The army commander also said that one month before the announcement of the new chief, he had learnt there was a "smear campaign" against him, according to the sources.
This, he said, was "very intelligently" being done for the last four to five months.
The Commander said he learnt of an enquiry by Controller General of Defence Accounts in which CDA Guwahati and CDA Patna probed his procurements and nothing came out of it.
He also said he would like to get to the bottom of the issue.