Here are top 10 developments in the story:
PM Modi was seen talking separately to Army Chief General Dalbir Singh Suhag at an Air Force Day function this evening and is believed to have taken a brief on the border situation.
The Prime Minister's comments were seen as a response to political rivals who have accused him of focusing more on campaigning for October 15 state polls than the border crisis.
Two women were killed and 20 people injured on Tuesday as Pakistani troops targeted over 60 Indian outposts and three dozen villages near the 200-km International Border in Jammu and Kashmir with heavy mortar shelling and firing through the night.
Indian officers said their soldiers gave a "strong and befitting reply". India, say sources, targeted 73 Pakistani posts with mortars and small arms.
India has warned Pakistan that it is not afraid of escalating fire. Sources say Indian forces have been told to reject any offer of talks at the border until all firing across the International Border and the 700-km Line of Control - the de facto border - stops. Pakistan asked for a flag meeting last night but India did not respond.
More than 20,000 villagers have fled their homes near the border to escape the shelling that has damaged houses and ripped power cables and electricity transformers. Thousands have signed in at government shelters and many are staying with friends or relatives.
Sources in the government tell NDTV that PM Modi "has left the management of the crisis to his team led by the National Security Advisor after indicating broad guidelines about not succumbing to any blackmail and responding appropriately."
Hostilities spiked on Monday when five villagers were killed and 34 injured in Arnia in one of the worst violations by Pakistan of the 2003 ceasefire between the two countries.
Senior military officials of India and Pakistan talked over the hotline for five minutes yesterday. Both sides accused each other of violating the ceasefire, Army sources said in Delhi.
India has accused Pakistan of firing to distract its forces and help militants infiltrate into Kashmir. Indian army sources tell NDTV they believe nearly 700 militants are waiting to cross into the Kashmir Valley from across the border.
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