He asserted that the army does not believe in speaking but in displaying its valour.
"Our army is happiest when we sleep in peace. They have no complaint. But they will never forgive us if we sleep when we should be awake. Unfortunately, we have been found sleeping when we should have been awake.
"Eternal vigilance is the price of liberty. We have to keep alert always. It will be injustice to the army if we sleep away when we have to be awake," he said without elaborating.
"Our army does not speak but displays its valour. When I would say this earlier, they (critics) would tear my hair out. They would say Modi is sleeping and doing nothing. Like our army which does not speak but displays its valour, our Defence Minister also does not speak..." he said with a pause as the audience broke into applause with some raising patriotic slogans.
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Modi said the ancestors in hundreds of years of India's history never waged a war to capture a country. "But if it comes to fighting for values and ideals, India is never found wanting," he said.
"They never thought these are the same people who pelt
them with stones, breaking their head and damaging eyes. The attack is sometime so severe that they even face death," Modi said, praising armed forces' rescue efforts in Kashmir.
He also highlighted their relief work during other natural disasters and recalled their efforts in Uttarakhand, which was hit by massive floods in 2013.
Recently, they rescued over 5,000 Indians and people from other countries, including Pakistan, from war-hit Yemen, he said.
On the occasion, he also asserted that his government has fulfilled all the promises it had made while rolling out OROP for ex-servicemen, saying over Rs 5,000 crore has already been distributed to them.
Attacking previous Congress governments without naming, he said they made tall claims but never fulfilled them. "Some governments were so clever that they even made budgetary provisions of a meagre Rs 500 crore," he said, citing figures for monetary benefits to retired soldiers following the OROP implementation.
"We have promised to pay the money due to forces in four instalments under OROP and we are doing so," he said, adding, "I am content that we are keeping our promises."
Praising the armed forces for their bravery, he said they are also among the first ones across the world when judged on the yardsticks of discipline and concern for fellow human beings.
Praising the 'shaurya smarak', he said it is like a pilgrimage site.
"The Prime Minister's policy is we will not trouble anyone but if troubled, then we will not spare any one," he said.
Defence Parrikar Manohar Parrikar recalled there was never lack of valour in the country and cited examples of Shivaji and Maharana Pratap.
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During his speech, the Prime Minster also called upon the citizens to show respect to the defence personnel by clapping in their honour whenever they are spotted at public places like airport and railway stations.
"These are small things but play a major role in one's life," he added.
Before inaugurating the Shaurya Smarak, Modi, along with Parrikar, Chouhan, Madhya Pradesh Acting Governor O P Kohli visited the gallery at the memorial, where pictures of war heroes are put up, an official of the Public Relations Department said.
The Shaurya Smarak would apprise people, especially the younger generation, of the valour and sacrifices of those guarding India's borders. The memorial has been built on 12.67 acres land at a cost of Rs 41 crore, it said.