The Congress fought the 1984 elections on the plank of communalism, Jaitley alleged, adding that the party pitted the people of Punjab against one another.
"The state's public was made to suffer for 10 to 12 years, thousands were killed and living a normal life had become impossible," he said at a gathering here.
"After terrorism came to an end in the state, the Akali-BJP government was formed under the leadership of Prakash Singh Badal. We had forged a social alliance, not a political one," he added. Jaitley said the alliance worked towards healing the wounds of the people and brought back normalcy to the state.
"By conducting surgical strikes across the LoC, PM Modi did what the previous governments had failed to do", he said.
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Jaitley also termed the demonetisation measure as "an attack on 70 years of corruption".
Jaitley also launched an attack on Amarinder Singh, saying the Punjab Congress chief indulged only in vendetta politics after the Congress came to power in the state.
"The Congress got a readymade peaceful environment but failed to achieve anything remarkable. During its 5 years of rule, it only indulged in political vendetta and Amarinder Singh even put Badal behind the bars," he said.
Jaitley said Badal has worked hard for the development of the state after coming to power in 2007.
"During the last almost 3 years of the NDA regime at the Centre, Punjab has got AIIMS, IIM, IIT and dozens of central educational institutions. The state has got a makeover with developed villages and cities and a dense network of highways," he said.
"Amritsar has been chosen as smart city. I have been around the world but have never seen such a city. The facelift which the state government has provided to Amritsar is breathtaking," he added.