The biggest challenge to Indian Prime Minister Manmohan Singh’s government, as many pundits contend, will come not from the opposition Bharatiya Janata Party (BJP), but from his own lackadaisical attempts to curb the clique of corrupt, inept and brazenly nonchalant sycophants surrounding the once respected but now, increasingly, despised economist-turned-politician.

Corruption has, over the years, metastasized into a deadly cancer that is eating into the country’s polity and adversely affecting the economy. Transparency International (TI), the Berlin based international organisation that assesses the level of corruption and transparency around the world, had warned in the past that India’s corruption level could scare away investors, including those already present in the country. TI’s integrity score for India declined to 3.1 in 2011, down from 3.3 in 2010. India’s ranking in TI’s corruption perception index also worsened to 95 out of 183 countries surveyed that year, down from 87 out of 178 countries in 2010.

India’s proliferating corruption culture is also reinforced by conclusions drawn in an Asia Pacific survey conducted by the Hong Kong-based Political & Economic Risk Consultancy Ltd (PERCE), rating India at 8.67 (on a scale of zero to 10, with the upper end being the worst case of corruption).

The proverbial can of worms has opened up for Singh with the sacking of two of his senior cabinet members, railways minister Pawan Kumar Bansal and law minister Ashwani Kumar, over separate allegations of bribery and manipulation of an official report by the Central Bureau of Investigation (CBI) on irregularities in the allotment of coal blocks between 2004 and 2011, respectively.

While the Congress party may have hoped that the resignations would mollify the pack of wolves baying for the two ministers’ blood, the opposition BJP is now calling for Singh’s resignation because his cabinet ministers had made a mockery of the country’s judiciary and tried to control the independent CBI and use it for their own interest.

The Congress-led government is also being blamed for failing to check a slowdown in India’s economic growth. International economists say that India can add a couple of percentage points to its growth rate if the revenues running into billions derived from the corruption-driven “parallel economy” — the euphemism for the unaccounted money changing hands under the table — flowed to the state coffers. India’s growth rate has fallen to a decade-low 5 per cent.

The prime minister, an economist by profession, should know by now that there is widespread frustration among foreign investors who are disenchanted with what was once touted as “India shining” and a very promising market in the quartet of dynamic emerging economies called Brics — the acronym for Brazil, Russia, India, China and South Africa.

Singh’s second term as prime minister, which started in 2009, witnessed a dramatic surge in corruption cases, including the surreptitious allocation of telecommunications spectrum and coal blocks, defence contracts and the disastrous handling of 2010 Commonwealth Games. The government maintains that it has preserved its “high moral ground” by firing the two ministers. However, critics scoff at this claim, saying that if that were true, the government should have immediately kicked out the two ministers instead of dragging its feet for such a long time. The attempt to control the CBI — the “caged parrot” — and turn it into a useful tool serving those in power, is a manifestation of the arrogance and high-handedness accompanying corruption in high places.

Indeed, the kick-backs paid in the shady Bofors arms deal of the past century appear to be small change compared to the billions involved today. Nothing moves in India these days without someone paying or receiving bribes and favours. The world’s biggest democracy faces a crisis of values.

India’s political leadership seems uncomfortable at tackling corruption. The broom must be used to sweep and clean the political strata and the bureaucracy notorious for rampant corruption. Prospective candidates — and this is not just confined to the Congress party — begin their quest for a seat in parliament by lying about their election fund. Despite their aversion to paying bribes, India’s businesses have also worked hand-in-glove with corrupt politicians.

Prime Minister Singh’s government has, in the past, deflected attention from cases of corruption offering, instead, alternative solutions. But how long can Singh deflect criticism about his leadership style and his tolerance of people who are masters of graft? Singh’s emphasis that he has “nothing but national interests at heart”, seems to lack credibility.

According to the highly-respected US economist, Nouriel Roubini, India’s economic advantages over other countries may be lost and its businesses could be hit by the excessive corruption in the country.

India, which can ill-afford to lose business and investor confidence, faces the urgent task of fighting the cancer of corruption that can wreck its national economy.

Manik Mehta is a commentator on Asian affairs.