"I don't know whether it (Murali's action) is legal or illegal. It's the umpires' job to decide," said Waugh, on a short visit to Pune to promote AMP Sanmar Life Insurance of which he's the brand ambassador.
But Waugh had a word of praise for the spin wizard, saying, "Murali has a lot of talent and he's a real challenge (to the batsmen)".
Predicting a closely-fought series between Australia and India in September, Waugh felt winning would be a tough call for his successor Ricky Ponting.
"He (Ponting) is a strong captain and under his leadership Australia will perform well in the cricket series coming up in September. (But) winning in India will be tough for Australia and the series will be a close one."
Waugh also predicted a bright future for Indian cricket.
"The future of Indian cricket is pretty good as a lot of new talent is being created by some good academies here," said Waugh.