"In no other time has India faced multiple security challenges. We face infiltration in J-K, Maoist and Naxalite problems in central India, several insurgent and separatist groups in Northeast and threat of terror from a number of groups," he told a special session of Bharat Chamber of Commerce here.
The government was building capacity to tackle the challenges, he said, adding, "Not a day passes when we are not adding a brick to India's internal security capacity. But it will take time."
Referring to recent White House document 'National Doctrine for Security', he said it has identified al-Qaeda as the only enemy as far as terrorism was concerned.
"It seems the US has only one enemy as far as terrorism was concerned. The whole document is on how to defeat al-Qaeda. That is the only challenge the US faces... But we face multiple security challenges. Within the limits of capacity, we will have to deal with all the challenges," he said.
Chidambaram said the country's police-population ratio was among the lowest in the world -- ranging from as low as 80 per 1,00,000 to the highest of 350 per 1,00,000 in Delhi.
"We need to raise our police-population ratio," he said. In the last two-and-half years, state governments had annually recruited an average of 92,000 constables and would recruit around 1,00,000 this year, he said.
But even after recruiting nearly 3,00,000 constables, another 5,00,000 vacancies will remain.
"For reasons good or bad -- mainly bad, the Centre had recruited only 36 IPS officers every year since the past four years," he said.
This year it would recruit 220 IPS officers and the same number would have to be maintained for seven years to reach the sanctioned strength of 4,300.
"We have to expand national (intelligence grid), IB, CBI, NIA and RAW. Hopefully we will create the National Counter- Terrorism Centre (NCTC). All this will require fine leaders to be carefully chosen and trained," he said.
Chidambaram said there were also problems of training institutes, trainers, housing, barracks and money for buying equipment and uniforms.
"In every aspect of policing, no matter how over ambitious we are in terms of recruiting officers, buying equipment, providing training institutions and trainers, there are serious limits to capacity building," he said.