"We have a major security challenge which also involves an element of uncertainty. It also involves a lot of national resources being diverted in that direction," Jaitley said while addressing the SBI Economic summit here this evening.
The Minister was quick to add that "security challenge will always be the top priority over every other requirement because national sovereignty is the first priority for the government."
"Islamic State is also a challenge and the global economy cannot be delinked from their threats," he said.
Following the September 18 attack, there have been calls for retaliation from many quarters, including a section in the ruling party itself.
The government has mounted an aggressive diplomatic push to isolate Islamabad at every possible international fora.
Also, Prime Minister Narendra Modi yesterday chaired a meeting to review on Indus Water Treaty with Pakistan and said "blood and water cannot flow together".
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