"On one hand, Prime Minister wants to project himself as great champion of good governance. On the other hand, he allows his colleagues to make communal remarks," she said, while addressing a Congress chief ministers' meeting here.
Gandhi accused the central government of "giving huge tax cut bonanzas to the corporate sector" while drastically cutting public expenditures for social sector programmes relating to education, health, sanitation and rural roads.
She said "a dangerous duplicitous game" was being played out and an atmosphere of fear has been whipped up.
"On the one hand, the prime minister wants to project himself as the great champion of good governance and constitutional values while on the other he allows many of his colleagues to make vile statements and foment communal polarisation. This has damaged our secular fabric."
Gandhi said the "substance and style" of the Bharatiya Janata Party-led government was a cause of great concern.
"They raise many disturbing questions... There are systematic attempts being made to dismantle the edifice of the welfare state built up over the decades by successive Congress governments," she said.
She said that in the guise of giving more untied funds to states, the central government has ended up imposing additional burdens on all of them.
"Eleven states, especially of whom seven are represented here today, have been dealt a grievous blow by the abolition of the Planning Commission and of the grouping called 'special category states'," she said.
Gandhi claimed there was unprecedented centralisation of power, "deliberate by-passing of parliamentary procedures and practices, threats to civil society and warnings to the judiciary.
"The prime minister has broken with tradition and taken domestic politics to audiences abroad.
"Boastful claims, exaggerations and downright falsehoods characterise most of his statements. His election promises are now being dismissed, in the words of one of his own key colleagues, as 'chunavi jumlas' (poll idioms)."
Noting that Modi had made U-turn from his earlier positions on a number of issues, she said: "On some, like the GST and UID, he seems to have discovered their virtues. But on other turnabouts, like on the 2013 land acquisition law and on the National Food Security Act, he has to be strongly opposed."
She urged the Congress to protest when the central government worked against the public interest.
Gandhi said one of the lessons the Congress had learnt from the Lok Sabha election was the need to vastly improve communications and marketing skills, adding a party can have great accomplishments but people need to know about them.
The meeting of Congress chief ministers is the first since the Congress lost the Lok Sabha election last year.
Gandhi, who started these meetings when the Congress was in the opposition until 2004, said they had proved very useful in the past and the idea of Right to Information and rural employment guarantee scheme first took shape at the Guwahati conclave in 2002.