At the first convocation of Nalanda University, he said the varsity reflects an idea, a culture which flourished for 1,200 years before it was destroyed in the 13th century.
He said that over the years, India has conveyed the message of friendship, cooperation, debate and discussions through the institutions of higher learning.
"Dr Amartya Sen in his book 'The Argumentative India' has correctly pointed out that debate and discussion is the ethos, a part of Indian life which cannot be done away with.
He said the modern Nalanda should ensure that this great tradition finds new life and vigour within its precincts.
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"Universities must be bastions of free speech and expression. It (Nalanda) must be the arena where diverse and conflicting thoughts contend. There should be no room for intolerance, prejudice and hatred within the spaces of this institution. Further, it must act as the flag bearer for co-existence of multiple views, thoughts and philosophies," he said.
Mukherjee asked the students, who passed out of the varsity today, to progress in life, leaving behind "all narrowness of minds and constricting thoughts".
University, Mukherjee said it was a melting pot of Indian, Persian, Greek and Chinese cultures.
"Ancient Nalanda is known for high level of debates and discussions. Though the main subjects of study were Buddhist texts, importance was also given to critiques of Buddhism by various schools, study of Vedas and beyond," he said.
Mukherjee gave away gold medals to two students and 12 post graduate degrees at the convocation.
He also laid the foundation stone of the 455-acre permanent campus of the university in the foothills of Rajgir. It will be built with the help of "green technology".
Till now, the classes were being held in a makeshift campus near the Rajgir bus stand.
The School of Historical Studies, the School of Ecology and Environment Studies and the School of Buddhist Studies, Philosophy and Comparative Religions are operating in the varsity.
Kumar said when former President A P J Abdul Kalam visited Bihar to address a joint session of the state Assembly in 2006, he had desired that Nalanda University should be restarted following which land was identified and a bill was prepared.
The Chief Minister said it was Mukherjee who took keen interest in the project and announced it during the East-India Summit, triggering a positive response from southeast Asian countries.
Once the Centre started working on the project, the state repealed a law and handed over to it the land which was acquired for the project.