The disciplinary action against the Gandhi family loyalist came two days before the first phase of Assembly polls in Gujarat in what was seen as a bid by the grand old party to do some damage control before the crucial election.
Congress communications incharge Randeep Surjewala said on Twitter the action showed the party's "Gandhian leadership" and respect for political rivals.
"The Congress party has suspended Mani Shankar Aiyar from the primary membership of the party and served a show cause notice on him," Surjewala tweeted.
"This is Congress's Gandhian leadership and respect for its political rivals.... Will Modi ji display such courage," he asked.
Aiyar, 76, set off a political firestorm today when he called Modi a "neech kism ka aadmi" (a vile sort of man), a remark the latter claimed was a casteist slur against him.
In the run-up to the 2014 general election, Aiyar, a former diplomat, had sparked a similar controversy with his remarks about Modi.
"I promise you in the 21st Century Narendra Modi will never become the prime minister of the country... But if he wants to distribute tea here, we will find a place for him," Aiyar had said.
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