Addressing a meeting of BJP workers here, Jaitley pointed out that one of the main objectives of Prime Minister Manmohan Singh''s visit to Bangladesh was the Teesta river pact.
"The intention was good. But due to objections of a coalition partner (Trinamool Congress), (signing of) the pact was deferred. This is perhaps for the first time that foreign policy was seen as being influenced by internal contradictions," Jaitley said.
The deal on Teesta river, which originates in Sikkim and flows to northern part of West Bengal before entering Bangladesh, was high on the agenda of Prime Minister''s two-day visit to Dhaka. However, following West Bengal Chief Minister Mamata Banerjee''s reservations on the pact, it could not be inked.
Jaitley also criticised the UPA government for rising inflation and corruption, calling it "non-performing and completely paralysed as far as decision-making was concerned".
"Corruption is on the rise. Inflation has been very high over the last three years and government appears to have run out of ideas to deal with the situation. It is only increasing the interest rates," Jaitley said.
The BJP leader said the Vajpayee-led NDA government had focussed on infrastructure development by constructing roads in rural parts, highways, power and telecom sector.
"However, these success stories were converted into scandals in the UPA regime," he said.