Senior Congress leader and former Finance Minister P Chidambaram on Thursday took on the government for presenting a "disappointing" budget and termed demonetisation "a terrible" decision.

Chidambaram, while participating in the discussion on General Budget in the Rajya Sabha, also criticised Prime Minister Narendra Modi for his "raincoat" jibe at former Prime Minister Manmohan Singh.

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"The PM should remember that the chair he sat on was used by Pandit Jawaharlal Nehru and even Atal Bihari Vajpayee and hence he should use right language," said Chidambaram.

Criticising the government on the budget, Chidambaram said that the government was always "fumbling, bumbling, scrambling" and it came up with a new narrative everyday.

On the move of demonetisation, Chidambaram said there were many people caught with crores of rupees in the form of new notes.

"This is the biggest scam of 2016. Where did they get these notes from? Did these go directly from the RBI press to them," Chidambaram asked.

"This means that corruption and black money have thrived after demonetisation. The NSSO says 15 crore people in this country are daily wage earners. Around 25.5 crore workers are daily income earners. Forty crore people were completely devastated by demonetisation for eight weeks. These 40 crore people may forgive you, but they won't forget the experience," he said.

"why should you demonetise and then remonetise," he asked.

He then said that the government has replenished Rs 9 lakh crore in new currency notes as against Rs 17 lakh crore old currency notes that went out of circulation.

Chidambaram said the government had inherited an economy that in the last two years of the UPA rule had grown by 6.1 and 6.9 per cent.

"The average for the 10-year period is 7.5 per cent. India is among the fastest growing large economies in the world. But through 2016-17, you made a series of mistakes, capped by the most terrible mistake," he said.

He termed the budget a "great disappointment" and estimated that 2016-17 will see a hit on GDP by 1-1.5 per cent and this trend will spill over into 2017-18 also.

"I am extremely disappointed with the budget. It is a damp squib. There is no relief to any section of society. Youth are disappointed as they don't see any hope," said Chidambaram.

"There is nothing special for farmers. You have introduced Pradhan Mantri Fasal Bima Yojna to provide the farmers a decent funeral. 75 per cent of small and medium sector units have closed down. Don't blame us for that. Go and listen to your Bhartiya Mazdoor Sangh on what they are saying about job creation and the situation on the ground," he added.

He further said: "Where are the jobs? Last year, the government created just 1.5 lakh jobs, and this figure is decreasing. After November 8, you have destroyed all job options. GDP is going to be hit by one per cent and may be by two per cent. Your budget is reflecting the same sentiment," he added.