Referring to the Union government's mid-night decision to send CBI chief Alok Verma on indefinite leave last week, Kejriwal claimed Verma was "suspended" as Modi feared he was to register an FIR in connection with the deal and launch an investigation.
"It is a Rs 36,000-crore fighter aircraft scam. An honest CBI chief was removed at 3 am as he wanted to lodge FIR against the prime minister the next morning. The prime minister should not be afraid of a CBI probe, if he is honest," Kejriwal said at a public meeting in Jaipur in poll-bound Rajasthan.
His supporters chanted that Modi is a "thief".
Verma was sent on leave after a feud erupted between him and his deputy, Special Director Rakesh Asthana, with the government saying the decision was taken to protect institutional integrity of the agency.
The government has also repeatedly denied allegations of corruption in the Rafale deal.
Referring to himself, Kejriwal said the people of New Delhi can proudly say that their chief minister is honest. Can they say the prime minister is "honest", he asked the crowd.
"The CBI conducted raid at my residence. I cooperated with the sleuths, offered them tea and sweets. All they found were four mufflers. People of the New Delhi can proudly say their chief minister is honest," he said.
Kejriwal asked the people whether they have got quality education, better healthcare, free water and cheaper electricity under the rule of the BJP or the Congress, whom they have voted to power in Rajasthan alternately in recent elections.
Making a case for his AAP, he suggested to the people that they should vote for the party, like the people of Delhi have done, and dislodge both BJP and Congress from governance in Rajasthan.
"We do not vote to make any party win, but to defeat the other. BJP and Congress had done a setting in New Delhi to loot people but the people threw both the national parties out of power and it can happen in Rajasthan as well," Kejriwal said.
He claimed the AAP government in Delhi has done what the two national parties could not do in 70 years.
The success rate of Delhi government-run schools was 10 per cent better than private schools, people get free medicines, treatment, water under government schemes and cheaper electricity, he said.
Talking about farm distress, he criticised Centre's crop loan insurance scheme, saying it was meant to benefit insurance firms and not farmers.
"Crop insurance scheme is a scheme to loot farmers. Premium amount is directly deducted from their bank accounts, and when it comes to raising claims farmers have to run from pillar to post," he alleged, seeking an end to the central government scheme.
The party, which will be contesting the assembly election, scheduled on December 7, for the first time in the state, on Sunday also released its draft manifesto and sought suggestions from people.
Kejriwal said people decide the fate of democracy and AAP would work for betterment of all sections of society.