In an address from the ramparts of Delhi's Red Fort, Modi sought to silence growing doubts about his leadership after key reforms stalled in a rancorous parliament session dogged by allegations of corruption involving some of his top lieutenants.
Modi, who has a reputation as a hardline Hindu nationalist, also warned against the "poison" of communalism in a wide-ranging speech that lasted for more than an hour.
But it was his comments on the dangers posed by corruption that drew most attention, including his admission that the problem went right to the top.
"I want to reaffirm that this nation will get rid of corruption. We can rid the country of corruption, we have to start from the top," said Modi.
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"Corruption is like a termite, it spreads slowly, reaches everywhere but it can be beaten with timely injections."
Modi's speech comes after some of the most senior figures in his Bharatiya Janata Party became embroiled in corruption scandals, including Foreign Minister Sushma Swaraj and the chief ministers of Rajasthan and Madhya Pradesh states.
The scandals have been particularly embarrassing as Modi's election win last year was built in part on a pledge to clean up government after a series of scams under the previous Congress administration.
Modi said there had been no allegations of money being siphoned off under his government but acknowledged there was work to be done.
"Corruption has to be removed fully from the system," said the prime minister. "With your support, I pledge a corruption-free India."
Modi's right-wing government has also been undermined by its failure to get key economic reforms through parliament in a session that wrapped on Thursday, including a national sales tax that the administrations sees as crucial to firing up growth.
While the economy is growing at around 7.5 percent, it still needs to pick up pace to elevate the hundreds of millions of people still mired in poverty in the world's second most populous nation.
Emphasising his determination to end poverty, Modi set a 1,000-day deadline for every village in India to get electricity, urging state governments which are responsible for power to ensure that every community is finally linked up to the national grid.
"Even after so many decades of independence there are 18,500 villages in India which do not have electricity," Modi said,
"I appeal to the states and all other stakeholders to connect these villages with electricity system within 1,000 days," Modi said.
The right-wing premier, who has been accused of doing too little to help the nation's poorest, said his government had already succeeded in enabling 170 million people to open bank accounts for the first time under a government-run scheme.
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"The poor are at bottom of the pyramid of development and we have to strengthen the base of the pyramid. If they are empowered, no one can stop us," said Modi who came to power in May last year.
Modi's first August 15 address from the ramparts of Delhi's Red Fort drew praise from across the political spectrum as he tackled issues such as sexual violence, religious unrest and a lack of toilets.
But 12 months on, problems are mounting up for the usually bullish prime minister who has had to beat a retreat on a controversial land bill as well as failing to steer the key Goods and Services Tax (GST) through parliament before the recess.
An editorial in The Times of India said that Modi's government was becoming mired in the same sort of problems that blighted its predecessor, namely an "inability to push economic reforms that would scale up growth, combined with corruption scandals".
According to a new poll conducted for the private ABP television network, 59 per cent of respondents feel Modi has not kept his promise of a corruption-free government.
And 43 per cent felt that Modi's fight against corruption had been weakened by not asking for the resignations of Swaraj and the other scandal-tainted chief ministers.
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