Prime Minister Narendra Modi said on Wednesday that social media has become a powerful instrument of democracy and it can be used as a "weapon" for good governance.

During a question-answer session after addressing the Bloomberg Global Business Forum here, Prime Minister Modi also asked people to remain vigilant against fake news on social media.

Responding to a question on social media, Modi told Michael Bloomberg that he was amused as the question was raised by a media baron.

He said social media can be used in a positive manner for good governance as information can be received from people living in remote areas.

"Social media has become a powerful instrument of democracy," he said, adding that he was himself active on social media.

"I have ordered action based on incidents that catch my eye," he said, citing an incident where he was able to instruct authorities to save lives in a flood-hit area in Gujarat when he was the chief minister.

When asked how as the head of a government he would like to use it, Modi said he was in favour of using the social media as a "good weapon" for good governance and he himself is trying in that direction.

Modi also said that people should first check when they receive a news on social media before forwarding it to others as there is a trend to spread negative news in an organised manner.

"It's encouraging to see established media take up initiatives to counter fake news," the Prime Minister said.

"The fashion of forwarding needs to be solved with technology," he added.

Recalling the Kandahar hijacking incident in 1999, Modi said the electronic news channels were new at that time and they broadcast everything related to the incident. This gave an impression that the government was under pressure and terrorists took advantage of the situation, he added.

After the hijacking episode ended, the news channels did an introspection and decided to rectify their mistakes. "I liked that," he said.

"This (trend of introspection) gradually ended due to competition to remain ahead of others and present news in a spicy manner," Modi said. "It's difficult to say whether the things will improve," he added.