"One thing that strikes us about South Asia is that the incidents of terrorism here are perhaps higher than any other parts in the world, next only to Syria and Iraq. It is of course a deep cause of worry - something we should think about," he said at the 'Counter Terrorism Conference 2017' here.
Without naming Pakistan, Mehrishi said a country sees terrorism as an instrument of its state policy or politics.
Mehrishi said in 20th century it was the war which was seen as a continuation of the politics and now there was a situation in South Asia where obviously some state players see terrorism as an instrument of state policy or politics.
"That itself is a bit of worry and needs to be taken account of," he said.
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"There has been no winner in terrorism, ever. There are no winners in this war. No terrorist group has ever achieved a political aim," he said.
Mehrishi said those who support terrorism end up as loser as the economic growth is affected, the families and societies get affected and there is heightened sense of insecurity among the citizens.
Referring to Bangladesh, he said the country was sitting on a "powder-cake" even though it is not talked about much and is sort of underplayed.
The Union Home Secretary said if terrorism has to stop, it has to be at the level of beat constables and not by the specialised anti-terror organisations like NSG.
He said the 2008 terror attacks in Mumbai were an example of how the state machinery has failed and what was wrong with the system.
Referring to the explosion in a train in Madhya Pradesh recently, Mehrishi said the incident did not draw as many eyeballs as it was not one with the magnitude of Mumbai attacks or the attack on a school in Peshawar.
He said there was a need to work together to disrupt financing of terror.
Mehrishi said minimising the effect of radicalisation on religious grounds was a tough battle to fight as it is the "battle of minds and battle of heart" and it is something everyone need to worry about.
"How we are going to stop the radicalisation of young who are being led by a selective sort of propaganda, the consequences of which we perhaps don't understand," he asked.
He said to "take on terrorism we have to improve the administrative, criminal justice systems".
About India, he said it actually has lost focus on some of the major issues of governance.
Mehrishi said since the last half a century or so, the
focus of governance has shifted from its core duties of law and order, health, education to announcing populist schemes which only benefits parts of the population.
"This hurts the poor the most," he said.
"There are no good or bad terrorists. Double standard not be used in counter terrorism practices. China has always condemned terrorism in all its forms and manifestations," he said, adding "we have to get to the root cause of the problem to end the menace".
He said China and India need to consolidate on terrorism.
About Indo-Pak relations, Yuan said China's position is clear that both the countries should cooperate and solve their core issues in a reasonable manner.
"China believes it is an initiative, while other countries think it is strategic," he said.
Yuan said China's progress depends upon the well being of its neighbours.
"China will also suffer if our neighbours are not well. China will ensure economic development of neighbouring countries," he said.