Addressing top commanders of Army, Air Force and Navy here, he cited the situation in the immediate neighbourhood and uncertainty due to the shift of eco-military balance to this region as the challenges posed to the country.
In his address, he underlined the need for upgrading the capabilities of the armed forces for which he favoured involvement of the private sector.
The Prime Minister also appeared to be on an exercise to control damage caused by the tussle between the then Army Chief Gen V K Singh and the government last year as he asserted "clearly and unequivocally" that the political leadership of India has the highest faith in its military and its institutional rectitude within the democratic framework.
The Prime Minister said there is "urgent and tangible progress in establishing the right structures for higher defence management and the appropriate civil-military balance in decision making that our complex security demands.
"I encourage you to give this the highest professional consideration, harmonise existing differences among the individual services and evolve a blue-print for the future. I can assure you of the most careful consideration of your recommendations by the political leadership," he said.