Expressing anguish over Dr Singh dubbing demonetisation as an "organised loot and legalised plunder", she deplored usage of such "strong words" by him against the move, which was aimed at strengthening the economy and held no personal gain for anyone.
"Actually organised plunder and legalised loot kept happening when he was the Prime Minister," she told reporters at Tamil Nadu BJP party headquarters 'Kamalalayam' in Chennai.
Referring to scams, including the 2G spectrum and the cases related to it in courts, she said though these happened during Manmohan Singh's regime, "he did not talk about it and ...(it appeared) as if he looked elsewhere".
She said "he (Dr Singh) was only a tool (nimitha matra) and somebody was directing him from behind."
"I have nothing but anguish, it is very anguishing.... I am unable to describe him by using strong words that he used (to comment on note ban)," the minister, who was in Chennai to take part in Tamil Nadu BJP's anti-black money day events, said.
She said Dr Singh had not even constituted a Special Investigation Team to probe black money as directed by the Supreme Court.
The BJP government's first step was to constitute the SIT after assuming power at the centre, she said.
"Where is legalised plunder happening? Dr Manmohan Singh, I am very disappointed," she said.
The Defence Minister said the government has been very transparent and has also explained why demonetisation was done.
On Congress asking if demonetisation was a success, she said, "All the money that was deposited (in banks following note ban) was not white money."
About Rs 2,000 crore were deposited even in accounts that had a negative balance and such cash was withdrawn too and action was taken in this regard to battle black money, she claimed.
Ms Sitharaman said that notes ban resulted in the reduction of stone-pelting incidents in Jammu and Kashmir to 600 last year from more than 4,000 before demonetisation.
Bereft of black money, terror elements were trying to rob banks in Jammu and Kashmir to get cash, she said.
Demonetisation was done with cash to GDP ratio in mind, the BJP leader said, stressing it was not a "sudden decision" and was aimed at avoiding black money from growing and identifying the existing unaccounted cash.
She noted that the BJP's 2014 Lok Sabha election manifesto assured the voters elimination of black money apart from efforts to retrieve unaccounted money from tax havens.
Explaining the rationale behind the note ban, she said for the growth of a nation, transparency in economy was needed.
An informal economy wherein approximately 86 per cent of transactions were cash-based would not be a "strength" for the country.
Referring to reports of international auditing firms, she said high denomination notes were used for hoarding black money.