On this occasion, Dr Singh also questioned the Bullet Train project of the NDA Government, terming it as "an exercise in vanity".
Opposition parties are observing "black day" on Wednesday.
Singh said that as the then finance minister, he had stepped forward to provide the funding from the Centre. To promote a less cash economy, cursive steps like demonetization is ineffective and the cash in circulation after one year is close to 90% of the previous levels, he added.
Singh said that the government needs to make a "frank admission of problems", adding that "while denigrating the past, the Prime Minister is also exaggerating what he will do in future".
Mounting a powerful defense of the demonetisation measure created to curb black money, Finance Minister Arun Jaitley on Tuesday said that note ban can not be a one-stop solution to cleanse all corruption, but it did give a "new direction" to economic and financial decisions.
While addressing the traders and businessmen in Ahmedabad on Tuesday morning, Manmohan Singh said that he was shocked to hear the announcement made by Prime Minister Narendra Modi on 8 Nov past year and was thinking who could have suggested him to take such a reckless step.
The Congress fielded former Prime Minister and economist Manmohan Singh to take on the ruling NDA on the eve of the first anniversary of demonetisation.
"We know by now that none of the stated objectives of eliminating black money, terror financing and counterfeit currency have been met". "Demonetisation has proved to be a mere bluster to reap political dividends while the real offenders have escaped", he said, again calling it "an organised loot and legalised plunder". It had been suggested many times in the past as well, but as a responsible government, we never took such a drastic measure.
'One must also remember that nowhere in the world has any democracy undertaken such a coercive move, withdrawing 86 per cent of legal tender in one single swoop.
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 fact that more than 99 percent of demonetised currency came back into the banking system, has punctured the government's claims". "Manmohan Singhji has said that note ban was a dacoity". The Congress has chose to field Singh, an economist of repute, to take on Prime Minister Narendra Modi in his home state. Every one per cent loss of GDP costs our nation Rs 1.5 lakh crore. "Demonetisation and GST have sown a deep-rooted fear of tax terrorism among businessmen".
Trinamul Congress chief and West Bengal chief minister Mamata Banerjee also hit out at the government, saying demonetisation was a big scam.
He said the note ban decision led to a larger formal economy, cleaner economy and bigger tax base and asserted that the government strongly stands by its decision a year after it made the "historic" announcement, marking an "watershed moment" for the economy. "These twin blows damaged India's SME sector and our businesses had to run to Chinese imports at the cost of Indian jobs", Singh said.