Singh also took a dig at Modi's decision to introduce bullet train in India and said, "The bullet train, launched with much fanfare, is an exercise in vanity".
Manmohan Singh criticised the government for an attitude "of suspecting everyone to be a thief or anti-national", and said, "low-level rhetoric is damaging to democratic discourse".
She said demonetisation was not to combat black money but was aimed at to "convert black money into white money for vested interests of the political party in power".
Attacking Prime Minister Narendra Modi, Dr Singh said that Mr Modi tends to exaggerate what he will do in the future. He should take steps to rebuild the economy after this blunder, former prime minister Dr. Manmohan Singh said in an interview to BloombergQuint. Modi must accept his mistake and work towards rebuilding the economy, Dr Singh further said.
The former PM said that he was shocked when he heard PM Modi's note ban announcement previous year and "wondered who advised him on this reckless step". "Individual tax payers' number has increased, digital transactions have gone up and terror funding has squeezed", Jaitley said on eve of note ban anniversary.
Referring to the note ban exercise as "organised loot and legalised plunder", the former prime minister went on to add how shocked he was after hearing the announcement and wondered who advised Modi to inflict such reckless step.
"The fact that more more than 99 per cent of the (spiked) currency came back into the banking system has punctured the government's claim".
Earlier addressing the India Today Conclave, Jaitley sought to puncture claims that demonetisation had adversely impacted the small and medium businesses, a bulk of which were in the unorganised sector.
The Finance Minister said he was "more than satisfied" with the new direction the economy is moving. "And today, there isn't an global agency which does not eulogise the kind and quality of the structural reforms Indian is making".
"Measures such as demonetisation and greater digitization of transactions in the economy, introduction of the goods and service tax, linking of most financial transactions with Aadhaar are all steps which will greatly improve transparency, compliance and tax buoyancy", said Sudhir Kapadia, national tax leader, EY India. The Congress has made a decision to field Singh, an economist of repute, to take on Prime Minister Narendra Modi in his home state.
"Even this is bound to be a gross underestimate as the pain of the informal sector is not adequately captured in the GDP calculations". Every one percent loss of GDP annually costs our nation 1.5 lakh crore rupees.
Countering this, Singh said, "The government says that they will pursue all those who made large deposits in banks after demonetisation".
Trinamul Congress chief and West Bengal chief minister Mamata Banerjee also hit out at the government, saying demonetisation was a big scam.
Comparing the escalating rise in India's imports from China, Singh said the country's import in first half of 2016-17 was worth Rs 1.96 lakh crore, whereas in 2017-18 it increased to Rs 2.41 lakh crore.
Calling the withdrawing of 86 per cent of legal tender in one single stroke as undemocratic and a coercive move, the former Prime Minister said "the demonetisation was clearly not the solution" to end the menace of black money and tax evasion in India.