"Mani Shankar Aiyer's 'Neech' attack on Prime Minister-- a deliberate casteist statement, a convenient apology, a strategic suspension. People should see through this game," Jaitley tweeted.
Jaitley lashed out at Aiyar, saying his remark displays the mindset that "only one elite family" can rule this country.
Aiyar earlier today called Modi a "neech aadmi" (vile man) who does "dirty politics" after the prime minister targeted the Congress saying that parties seeking votes in B R Ambedkar's name tried to erase his contribution to nation building the party.
"The strength of India's democracy will be displayed when a person of humble background politically defeats the dynasty and its representatives," the finance minister said in a tweet.
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In another tweet, Jaitley said, "Mani Shankar Aiyer's 'Neech' remark against the prime minister displays a mindset that only one elite family can be a ruler and the rest are only the 'Neech'."
Earlier, Aiyar claimed that it was the country's first prime minister Jawaharlal Nehru who recognised Ambedkar's potential.
The Congress tonight suspended Aiyar from the primary membership of the party and issued him a show-cause notice for his remark.