Addressing students through video-conferencing and web-casting, the President said students are the bright future of the nation.
The extent of India's progress will be decided by their energy, drive, initiative and industry, Mukherjee said.
"Understand our nation and its institutions. Read, learn and formulate views on national issues. Choose to engage with our beautiful, complex, often difficult and sometimes noisy democracy," the President was quoted as saying in a press release issued by the Rashtrapati Bhavan.
Understand your rights and duties well, especially towards those who are less fortunate. The voiceless deserve your voice; the weak deserve your strength; and the needy deserve your help. Make the best use of your knowledge in the service of the nation and its citizens, he said.
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Mukherjee said pursuit of academic excellence should be accompanied with the quest for moral development.
"Students' preparedness for life should be on the foundation of essential values of patriotism, compassion, tolerance, integrity and equality," he said.
He suggested that an Inspired Teachers' Lecture Series be initiated to carry forward the benefits of excellence in teaching.
The President's new year message was received by institutes connected over 400 locations all over the country.
It is for the first time that the President, as visitor of the Central universities and institutions, has used the National Knowledge Network to reach out to the students and academic communities.