"Gujarat ni janata tamne sabak sheekhvadi deshe Soniaben (People of Gujarat would teach you a lesson)," Modi said at a public meeting here.
"First she said there has been no development in Gujarat. Then she said whatever development has taken place in the state was because of the Centre's help," he said.
"I challenge the Centre to stop grants to Gujarat for one year but it should also stop collecting taxes from the state for that period," he said.
Modi said the Congress President has been levelling false allegations against him.
"She calls me maut ke saudagar (merchant of death). Am I so," he asked the gathering.
Gujarat, he said, has made progress at all fronts under the BJP rule.