The Kerala Assembly opposition leader was speaking to media after a protest organised by the Congress state unit here in the wake of the currency reforms announced by the Centre.
The state party unit maintained that the Modi government's surprise move lacked preparedness and had shattered the economic foundations of Kerala.
"Narendra Modi is rejoicing in the suffering of people due to demonetisation, just like he had rejoiced during the 2002 Gujarat massacre. Modi, who had written off crores of rupees due from corporates, is not even ready to take steps to reduce the burden of the people affected by the policy," he alleged.
"People are afraid to send money to the state due to this policy. It has affected the economic structure and the daily life of the people," he said.
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The opposition leader said the move has adversely affected agriculture and small-scale industries in the southern state.
"The hard earned money of people engaged in agricultural sector was deposited in co-operative banks and this move has stopped them from withdrawing their money," he said.
The Congress leader said the industrial sector in the state has come to a stand still and enterprises have started asking their employees to go on leave.
"Adding to the suffering of people due to demonetisation, the rice distribution through public distribution system has stopped due to the apathy of the state government.
"Distribution of rice has been stopped due to labour unrest over wages in the state. This has affected stock procuring at ration shops. The Kerala government is silent on the trade union issue and not taking any step to reduce burden of the people," he said.