He made the annoucement in Srinagar after undertaking a visit to the state for first hand information of the situation which has turned grim resulting in the death of over 130 people.
The Prime Minister also called upon other states to also pitch in with relief assistance in whatever way they could.
Expressing his anguish at the loss that has been caused in neighbouring areas in Pakistan-Occupied Kashmir (PoK), he said India was ready to provide humanitarian assistance to the affected areas if Pakistan requires it.
"In this hour of distress, the Prime Minister offered all possible assistance to the people of the region and said that the government of India is ready to provide humanitarian assistance to those areas if the Pakistan government needs it," he said.
"The Prime Minister shared the pain and anguish of the people as he was briefed in Jammu and in Srinagar by Chief Minister Omar Abdullah and senior officials of the state government about the damage caused by the floods," a PMO statement said.
The Prime Minister observed that the Rs 1100 crores which is being made available to the state government through the state Disaster Relief Fund would not prove to be adequate in view of the magnitude of the tragedy.
"An additional special project assistance of Rs 1,000 crore will be made available by the government to the state for flood relief and rehabilitation. More assistance would be provided, if required, after a proper survey of the situation has been made," he said.
Terming it as a national level disaster, Modi said that the centre stands shoulder to shoulder with the state government and the people of the state in this hour of crisis.
The Prime Minister said that Rs 2 lakh will be provided to the next of kin of each person whose life has been lost in this calamity and Rs 50,000 would be provided to each person who is grievously injured and will be provided from the Prime Minister's Relief Fund.
Modi said that in order to meet the immediate need of providing shelter to those who have lost their homes, the centre Government will provide 5,000 tents from the Armed Forces and the Central Paramilitary Forces.
"These will be moved from Monday onwards to various locations in the state. Rs 5 crores will be provided from the Prime Minister's Relief Fund to purchase one lakh blankets to the needy in this cold weather," he said.
He maintained that in order to supplement food supply to children, the centre will airlift 50 tons of milk powder. One consignment of essential medicines is being airlifted today evening to meet the emergency needs.
More will be supplied subsequently as required, he said. He added that teams of the Telecom department have been directed to restore telecommunication links in the fastest possible manner to the affected areas. "Army engineers are working to repair damaged bridges. Boats have been requisitioned from Gujarat and Maharashtra," Modi said.
He said that 2000 solar lamps will be provided to help those where power supply has been lost. Modi said was briefed by Home Minister Rajnath Singh about the extent of damage caused by the floods and the suffering that the people were undergoing.
In view of the seriousness of the situation, the Prime Minister had held a crisis review meeting with the Cabinet Secretary and other senior officials.
The Prime Minister said planes bringing relief material to the state would airlift stranded tourists on the way back. He appreciated the rescue and relief work being done by the Armed Forces and NDRF personnel working in close coordination.
Earlier, the Prime Minister who flew into Jammu, reviewed the flood situation at a high-level meeting attended by Chief Minister and top officials. The Chief Minister briefed him on the devastation caused by the floods.
The Prime Minister undertook an aerial survey of the flood-hit areas in Jammu zone. Torrential rains have triggered flooding, landslides and house collapses leaving behind a trail of death and destruction.
The Prime Minister saw several buildings and homes partially submerged with swirling water gushing around. People, carrying some of their belongings, were seen trudging in waist-high water to safer locations.
Many vehicles were found stranded. In some places, people were atop buses to reach safer destinations. During the meeting with the Prime Minister, Omar sought more rescue-related initiatives, including commencement of air rescue operations in view of the grim situation in the state, officials said.
The Prime Minister was accompanied by Minister of State in the PMO Jitendra Singh and Army Chief General Dalbir Singh Suhag. Modi was earlier received at the airport by J and K Governor N N Vohra and the Chief Minister. The state is facing the worst floods in the last 50 years. Over 11,000 people have been rescued so far by the security forces.
PM offers assistance to Pak for relief ops in flood-hit PoK
In a humanitarian gesture, Prime Minister Narendra Modi today offered all possible assistance to Pakistan for carrying out relief operations in the flood- ravaged Pakistan-Occupied Kashmir (PoK).
Making the offer after undertaking a visit to flood-hit Jammu and Kashmir for a first-hand assessment of the situation, Modi expressed his anguish at the loss that has been caused in PoK.
"In this hour of distress, the Prime Minister offered all possible assistance to the people of the region and said that the Government of India was ready to provide humanitarian assistance to those areas if the Pakistan government needs it," a PMO statement said.
Modi said like in Jammu and Kashmir, the people in PoK region too were bearing losses due to the floods. This is a humanitarian work and India will never be behind in doing such work, he said.