Hitting out at the two parties, Gandhi said the damage would continue even if the state was put under central rule.
Under the alliance government in the strategically important state, several innocent people and brave soldiers were killed. "It cost India strategically & destroyed years of UPA's hard work. The damage will continue under President's rule (sic)," he tweeted.
Gandhi said: "Incompetence, arrogance & hatred always fails (sic)."
The BJP on Tuesday pulled out of the PDP-led Jammu and Kashmir government More than three years after they formed an uneasy coalition. It cited growing terror activities and radicalization in the valley making continuation of the alliance "untenable".
BJP General Secretary Ram Madhav announced the party's sudden decision of pulling out of the Jammu and Kashmir government at a hurriedly-called press conference.
The Congress ruled out any tie-up with the PDP. Senior Congress leader Ghulam Nabi Azad said that the BJP had committed a "Himalayan blunder" by forming a government with the PDP.
The alliance has devastated the state, be it economically or socially, and has left Jammu and Kashmir in a state of "ruins", he said.
Mehbooba Mufti, who submitted her resignation to the governor, said her party will continue to strive for dialogue and reconciliation in the state.
"I have told the governor we will not go into any other alliance," she said.
"I am not shocked as this alliance was never for power. PDP never believes in power politics and we worked for the people."
"It took us many months to work out an agenda of alliance based on reconciliation and dialogue. The BJP had support in the Jammu region and the PDP had support in the Valley.
(With inputs from agencies)