This week Modi, who will lead the BJP's general election campaign next year, said Patel would have been a much better first Prime Minister of independent India than Jawaharlal Nehru.
The cost of the statue and the political purpose behind it brought strong criticism from leading commentators.
Mohan Gurumurthy, of the Centre for Policy Alternatives, said Sardar Patel himself would have objected to money being spent in this way.
He had rejected India's main Hindu nationalist group at the time, the Rashtriya Swayamsevak Sangh, and had wanted to ban it.
Since his death however, the Congress Party had neglected his legacy and Modi's BJP has seized the opportunity to claim it.
"Now both the parties are trying to claim his legacy. If he had been alive, Patel would never approve millions to be spent on his statue," Gurumurthy said.
A Gujarat official involved in the project said it would be partially funded by small contributions, with the Gujarat government making up the difference. He denied it was a waste of funds, calling it "icon-based" development that would attract tourism.
Modi's spending on statues while millions live in poverty has evoked memories of Mayawati, the "untouchable" former chief of Uttar Pradesh and self-styled "Dalit Queen", who spent more than 30 billion rupees on statues of herself, as well as BR Ambedkar, the Dalit author of India's constitution, her former partner and party founder Kanshi Ram.