"There is no doubt that educational backwardness is the main reason why we have not been able to progress economically," he said here in his address at the inaugural summit of the United Economic Forum, a trade body.
Sayeed said he had always believed education is "most critical to uplift our community".
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The "decline" in the socio-economic and education status of the Muslims started as early as the 18th century, he said while recalling that "pioneers and geniuses" like Sir Syed Ahmed Khan and freedom fighter Maulana Abul Kalam Azad had advocated education for development.
While Khan started Mohammaden Anglo-Oriental College, known as Aligarh Muslim University (AMU) now, Azad understood the importance of education and believed that "Muslims could carve out a distinct niche for themselves in a secular and diverse India", he said.
Azad, who Sayeed recalled had opposed partition of the country, was chosen by Jawaharlal Nehru as independent India's first Education Minister and he heralded the nation's modern education, the Chief Minister said.
He said he did not find any "stark contradiction" between the need for religious education and the importance of having a secular modern outlook in today's world, recalling he himself had studied in a madrassa before graduating in law from AMU.
Referring to recommendations made by the Sachar Committee, appointed by the previous UPA government to study the socio-economic conditions of Muslims, he said it had found that their status in many areas "is lower than the status of Scheduled Castes and Scheduled Tribes".
The Committe's recommendations included setting up high quality government schools, including those exclusively for girls, in all areas of Muslim concentration, imparting skill training and making madrassa-educated persons eligible for formal technical education besides providing financial support to them, he said.
He pointed out the various efforts by his government in education and employment sectors in his state, including upgrading schools, creating satellite campuses of universities and imparting skill development training.