When revenue collection of a country accumulates in the hands of a few who are authorized to spend it, there is every chance and opportunity for corruption. Suppose only a hundredth of the national revenue reaches the central government and the rest goes to the states and local administrations by way of decentralization of power and authority to spend it. It would mean only one million would reach the central government instead of a hundred million. Then how can the central cabinet members donate 70 million to some poor multi-national telephone company or stash away 50 million in safe foreign accounts or decide to invest 10000 crores on a new nuclear power plant when power plants of the kind are closing all over the world and conventional energy sources of wind, tide, thermal, hot water, hot rocks and solar are opening up? Every corrupt administration would be unwilling to part with the power to collect taxes and leave it to the states and local administrations. They, even when comparatively uneducated and without any notable scholastic achievements, know basic economics to direct all tax money towards them. The advantage of decentralization is that, while a 50 million corruption in the central government goes unnoticed, a 5 million corruption in a state government will become news, arrest and imprisonment. And a simple 1 lakh corruption in a village administration will result in a street riot! The more money reaches the coffers of a central government instead of reaching state treasuries and local administration chests, the more will be the corruption and stealing there; no prime minister can halt it or stop it. No acclaimed economist in India has ever learned this simple economics.
News: 2G and coal auction: Why PM couldn’t bring transparency? 17 February 2014.