The Indian government has said it will tackle rising Maoist violence through better police coordination and poverty reduction plans.
Maoists want communist rule across a number of states
The announcement follows a meeting in Delhi with chief ministers of states where Maoist rebels are active.
Earlier this month, Maoists in the states of Chhattisgarh and Jharkhand killed more than thirty people.
Maoists say they are fighting for more rights for indigenous people in at least five states.
The Indian states of Andhra Pradesh and Chattisgarh have outlawed Maoist organisations, also known as Naxalites, but others including the eastern state of Orissa have indicated they are against such a move.
The Indian Home Minister, Shivraj Patil, who chaired the meeting, said the federal government will help set up joint regional task forces to share intelligence on Maoist activity across state borders.
Mr Patil said the government will spend nearly $366 million a year to modernise the police forces, the Associated Press news agency reports.
Thousands have died in Maoist campaigns across central and southern India in the past 30 years.
The rebels are pressing for the creation of a communist state comprising tribal areas in the states of Andhra Pradesh, Maharashtra, Orissa, Bihar and Chhattisgarh.
The Indian government believes that there may be 10,000 armed Maoist rebels in India, correspondents say.