Amid reports of terrorist groups establishing legitimate businesses to fund their activities, the Central government on Friday said such outfits are making inroads into big cities and operating clandestinely.

"Terrorists are sneaking into big cities and operating clandestinely. They have been making their plans by hiding in the cities and will continue to do it," Home Minister Shivraj Patil said in New Delhi.

His comments came on the heels of National Security Advisor M K Narayanan's remarks that some fictitious companies in stock markets of Mumbai and Chennai have been traced to terrorist groups.

Patil said the influx of terrorists into major cities has a big impact on the national capital and asked its police force to remain on alert to frustrate designs to spread terror in the city.

"Delhi Police should maintain a high vigil," he said at the force's 60th Raising Day celebrations.

In the wake of the NSA's comments, Prime Minister Manmohan Singh had on Thursday said that all 'precautionary measures' were being taken.      

The Home minister also announced government's plans to provide insurance cover to all police personnel, a vulnerable lot working in dangerous conditions, to boost their morale.

"Though the government wants to provide insurance cover to all the citizens, the immediate priority goes to uniformed personnel. We are trying to do that," he said, asserting that government was ready to provide all assistance to policemen.