He said that the Indian Army was fully prepared and well trained to undertake any challenge, be it external or internal.
As many as 141 terrorists were killed in Jammu and Kashmir this year alone, General Dalbir Singh said.
General Singh, who retired on Saturday, inspected a Guard of Honour on the lawns of the South Block in the morning, before handing over charge to his successor General Bipin Rawat.
Addressing the media, the outgoing General thanked Prime Minister Narendra Modi and his government for giving the Army a "free hand" in conducting operations and also thanked the citizens for respecting the Army that boosted their morale.
General Singh saluted the martyrs who made the supreme sacrifice for the nation, the soldiers who serve in challenging areas like "Siachen, icy mountains, scorching deserts and dense forests" and those fighting insurgency and terrorism in the northeast and Jammu and Kashmir.
"I express my sincere gratitude to the honourable Prime Minister and the government for their full support and for giving free hand in conducting operations; for giving impetus to modernisation and for granting 'One Rank One Pension' to the ex-servicemen," General Singh said.
"I also thank the citizens of this country for supporting and respecting the soldiers which has enhanced the morale of the Indian Army immensely," he said.
"As you are aware, I have never given any TV interview because I strongly believe that actions must speak louder than words. The day I took over as Chief of the Army Staff I had said that our response to any action will be more than adequate, immediate and intense," he said.
General Singh, when he took over as the Army chief on August 1, 2014, had said India's response to any aggression from Pakistan will be "more than adequate".
"The Indian Army has delivered that in the last two and a half years. The Indian Army is the finest and the strongest Army in the world. Our leaders are most competent and unit leaders lead from the front and soldiers are bravest. I want to assure the nation that Indian Army is fully prepared, well trained to undertake any challenges, be it external or internal," he said.
General Singh said the focus of the Army was on operational preparedness and training during his headship.
Asked about the attacks like that in Uri, in which 19 soldiers were killed, and Nagrota, in which seven soldiers were killed, the outgoing Army chief said the attacks and infiltration have increased, but the Army has also killed double the number of terrorists compared with last year.
"We have displayed the power of firmness, resolve, ability and will power... as far as casualties are concerned, the infiltration attempts have increased. If we leave the casualties caused in those two incidents (Nagrota and Uri), the casualties are not so high," General Singh said.
"In 2012, we killed 67 terrorists, in 2013 we killed 65 terrorists... this year, only in Jammu and Kashmir, we have killed 141 terrorists. There are more incidents of infiltration, but we have killed more terrorists, almost double the number," he added.