The main function was held at the Motilal Nehru stadium near Lal Parade ground where state Chief Minister Shivraj Singh Chouhan unfurled the national flag and took the salute at a march past by various forces.
On the occasion, Chouhan said Madhya Pradesh, which was earlier known as a "dacoit infested state", is now an "island of peace".
As per the national statistics organisation, the state's economic growth last year was almost 12 per cent, while it had reached double figures in the last five years, he said.
Madhya Pradesh is on the path of increasing good governance which was helping the people, he added.
Reports of the day being celebrated in a grand way were received from all district headquarters of the state.
With a view to bringing brotherhood among all communities in the state, a 'Paigham-e-mohabbat' rally was organised in Bhopal by city north Congress MLA Arif Aqueel.
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