Gill, who is credited with rooting out militancy in Punjab, said that India has been facing terrorism for long, but this level, at which the menace confronts the nation and the world, was not imagined.
"We need to have overall very strict laws to deal with terrorism which should embrace all aspects," Gill, 81, said at a 'meet-the-press' programme here.
The former DGP suggested that special courts should be set up for expeditious disposal of terrorism-related cases as in many other countries.
"In our country, unfortunately, something which happened 20 years ago continues to drag on and becomes a matter of debate," Gill said in an apparent reference to the hanging of 1993 Mumbai serial blasts convict Yakub Memon.
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Gill hailed the Punjab police for the way they responded to the Gurdaspur terror attack, in which three terrorists were gunned down in a day-long operation.
"When the Punjab Police takes charge of an operation, it does not think which political leadership is leading it... It is a part of Punjab Police's training and the country is supreme (for them). This was shown in an exemplary manner," he said.
"Army's actual role is to fight an enemy force," he said, adding that the Punjab Police was "quite capable" of handling the operation.