PM Modi was addressing a gathering in Mumbai.
"The Emergency is not just to criticise Congress for the sin of attacking the constitution but to create awareness about its dangers," he said.
"A party that does not have internal democracy can never uphold democratic values."
He accused the Congress of "spreading lies"about fear and intolerance in the country. "In our history, whenever the Congress, especially the family feels their kursi (chair) of power is about to go, they start spreading all sorts of lies. They say that the country is living in fear and intolerance, and only they (Congress) can fix the problem... It is all a big lie."
Indira Gandhi's Congress government imposed the 1975 Emergency, during which fundamental rights were severely restricted, curbs were imposed on the media and several opposition leaders were jailed.
In an all-out attack on the Congress, PM Modi dwelled on episodes that he said demonstrated the extent to which the party went in curbing freedom.
"It wasn't just the media. Such was the arrogance of the Congress and the family that when Kishore Kumar refused to sing at a Congress function, his songs were banned from radio and television," he said on the legendary singer.
PM Modi added: "When a notice was served to the family, such was the arrogance, such was the ego that even the Chief Justice was not spared. An impeachment motion was moved against him in Parliament."
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India was turned into a jail, he said.The prime minister said it was important for the young people to be aware of what happened. "The youth of today enjoy freedom, they do not understand what it is to live without freedom. Hence they probably do not feel the pain and the anger of Emergency... Only a man who is thirsty understands the value of water," he said.