Nirmala Sitharaman blames Manmohan Singh, Raghuram Rajan for subjecting public banks to "worst phase."

Highlights Recalling when and what went wrong is absolutely necessary, she says

She earlier blamed Raghuram Rajan, Manmohan Singh for economic crisis

Manmohan Singh said Centre should stop blaming his previous government

In an ongoing war of words over the economy, Finance Minister Nirmala Sitharaman delivered a swift and sharp response to Manmohan Singh's comment that the government is "obsessed" with fixing the blame on its opponents. "Recalling when and what went wrong during a certain period is absolutely necessary," Nirmala Sitharaman told reporters in the US.

Conceding that there were some "weaknesses" in his regime, former prime minister Manmohan Singh had on Thursday said the Modi government should stop blaming his government for every economic crisis, as five years were sufficient time to come up with solutions.

"I respect Dr Manmohan Singh for telling me not to do the blame game. But recalling when and what went wrong during a certain period is absolutely necessary to put it in context, now that I'm being charged that there's no narrative at all about the economy," Nirmala Sitharaman said.

On Thursday, Dr Singh, who was voted out of power in 2014 after 10 years in office, said: "When I was in office, what happened did happen. There were some weaknesses. But you can't claim that the fault lies with the UPA always. You have been in office for five years. Mainly passing buck to UPA is not enough."

The former prime minister was responding to Ms Sitharaman's remark during her talk at the Columbia University that he, along with Raghuram Rajan as Reserve Bank of India (RBI) chief, had presided over the "worst" phase of the banking sector.

"I have just seen the statements by Finance Minister Nirmala Sitharaman. I won't like to comment on that statement, but before one can fix the economy, one needs a correct diagnosis of its ailments and their causes. The government is obsessed with trying to fix blame on its opponent, thus it is unable to find a solution that will ensure revival of economy," Dr Singh had said yesterday.

Hours later came the Finance Minister's retort. She said she had made the comment only in response to a question about Raghuram Rajan's criticism of a "centralised leadership" and the absence of a coherent narrative of the economy.

"I also understand there's already in India lots of discussion about the finance minister being out of the country and how could she talk about issues that are essentially to be spoken within the country.

"...if a political assessment has been made, nothing stops anyone from making it and it's certainly the right and prerogative of whoever wants to make it," the Union finance minister said.

"If there is a charge against us that we have not given a cohesive narrative about the economy, I'm sorry, probably it has not even reached the narrative that we're given about the economy or the target with which we are working or the response with which we are answering those stress in different parts of the country, those industries which are under stress, those messages have probably not even reached people who have commented on us," the finance minister said.

"I don't need to put the blame. It is more than apparent as to when the wrongdoings happened in banks and which is the government which is spending time to clear the clog from public sector banks and which is the government which is pursuing all those who have taken money during the UPA government and who've gone out to the country out of fear that action is being taken now under this government," she said.

"I would want to mix both my narrative together with stating what went wrong earlier. I wished the Congress had the courage of conviction to hear it...We never committed mistakes and corruption. We've not given any loans to cronies. We've never supported any wrongdoing and looked at the way when as prime minister, I would want to again recall the number of corruption cases which had happened during the UPA. Has there been anyone here (under NDA)?" she asked.

The minister said lessons had to be learned by people who "should have learnt it even earlier".