He said one of the ways to deal with corruption was to have policy-driven government.
Talking about federalism, the Prime Minister said his government was committed to empowering states as he believes that the country will prosper when states progress.
Modi said he feels states should be empowered irrespective of which party is in power there.
In this context, he referred to the decision to implement the Finance Commission recommendation of raising the devolution of funds to states by 10 per cent despite divisions in the Commission.
"For the first time after independence, out of total revenues generated through taxes, a majority of 62 per cent taxes were going to states, with only 48 per cent left in the central treasury. For the first time ever Delhi government's treasury is being reduced," he said.
He said even though the Finance Commission stood divided on increasing states share in central taxes, the government did not use the lack of unanimity in denying states their right and went ahead in taking the decision.
"We are trying to stregthen states irrespective of colours. We do not see colour of any party. We see only the tricolor," he said, amid repeated thumping of desks. he said.
Referring to the Swachha Bharat mission, he said it is not merely an inauguration process but a continuous movement.
Taking a dig at Samajwadi Party leader Mulayam Singh Yadav for talking about continued pollution at banks of Varanasi in Uttar Pradesh, Modi said, "I could not decide whether to laugh or cry. Was he giving the report card of Uttar Pradesh government or ...?"
Varanasi Lok Sabha constituency is represented by Modi and Yadav had said that despite the Prime Minister "cleaning" Assi Ghat there, it continued to be dirty.
In a pot-shot at Yadav, Modi said said Ram Manohar Lohia used to run Swachh Abhiyan and "it should not be that since he was doing so then Modiji should not do it."
He said this sacred work of cleanliness in the country should not be done by the head of state but is the task of 125 crore people.
Talking of toilets, he said government should be policy driven so that there are solutions to problems. He said it was more a question of pride of women and their security.
On Coal block allocations, the Prime Minister said when CAG gave its report, even those writing it were shocked that the scam could touch 1.86 lakh crore.
After Supreme Court cancelled 204 coal block allocations, a total of Rs one lakh crore has already been accrued through reallocation of 18 coal mines.
"When all are auctioned, it will surpass the CAG reading. But, the then government had propagated the zero loss theory at the time," he said.
The Prime Minister attacked those who had said he needs to be given a "visa" to come to Parliament, questioning how the level of politics could fall so much. His rivals had made the comment in the context of his frequent foreign tours.
"Do you have no other issue to criticise me? You should have enquired what I did when I went abroad...," he said, adding he utilises these occasions to get the best things in terms of research etc for India.
He informed the House that when in Japan he met a Nobel laureate for discussing on stem cell research for Sickle disease inflicting generations of tribals and not for any photo-op. He said research was now underway in Bangalore so that remedy to this disease can be found.
He also said that when in Australia, he was meeting farm scientists for growing maximum pulses from bad soil that come to the aid of poor farmers.
Modi highlighted the government's initiative of launching the soil health card and said even when one goes to a doctor he gets the tests done before prescribing medicines and farmers should have the right to get their soil tested before sowing crops as farm land has been destroyed by fertilisers.
He also talked of the self attestation certificates by ordinary citizens, noting that it may be a small step but it shows we trust citizens. "We believe in simplification of procedures," he said, adding that old pensioners now do not have to report to banks for their annual life certificate.
He also talked of the Jandhan scheme, saying criticism against it was unfounded and poor people used to dread going to banks, but now bank officials go after the poor to open their accounts and now even MNREGA money will go into bank accounts under the scheme.
Modi said despite negative incidents and bad publicity, the country received a number of tourism which can go higher.
He also talked of disaster management and cited the example of Jammu and Kashmir, saying during the floods the entire nation came out to help and he himself spent a lot of time to provide succor to the affected.In disaster management, he said one should not indulge in "tu tu, mai mai" but look for solutions through cooperation.