Mr Kejriwal said it takes courage to cancel the licence of a leading healthcare facility like the Max Hospital in Shalimar Bagh.
His comments came a day after the Delhi government decided to cancel the licence of the hospital for alleged medical negligence on multiple instances, including one in which it wrongly declared an alive baby dead on November 30.
The baby's body was handed over to their parents in a plastic bag, along with his still-born sister. He died during treatment at a nursing home in Pitampura a week later.
The Delhi Medical Association and the Indian Medical Association have criticised the AAP government's decision to cancel the license of the private hospital as harsh.
The DMA called the decision "irrational and autocratic".
Mr Kejriwal, however, attacked the previous dispensation in Delhi, alleging they were often hand in glove with the "big" and the mighty.
"If we had entered into any setting with the hospital, we would not have been able to face our conscience and would have lost the faith of the people. We are not against private hospitals. But we will hesitate to act sternly in cases of criminal negligence and looting of patients," he said.
Citing his government's handling of discoms, he said power tarrifs had not risen in Delhi in the past three years.
Attacking his political rivals, he claimed "some powers" were trying to crush him and his party. The chief minister sought people's support so that he can work "honestly".
Mr Kejriwal was speaking at the launch of the Jai Bhim Mukhyamantri Pratibha Vikas Yojna scheme as part of which students from the Scheduled Castes, Scheduled Tribes, Other Backward Castes and minority communities would be able to join private coaching centres to prepare for competitive exams and the Delhi government will provide an assistance of up to Rs 40,000.
They will be able to prepare for services, medical, engineering and other competitive examinations, Mr Kejriwal said.