As an Indian I often wonder, the real question is not why India is so corrupt(esp. at the lower levels of bureaucracy), rather how come certain countries have zero corruption at those levels? Perhaps I'm too pessimistic about human nature.
I think many people in India, who consider themselves to have morally 'good' - wouldn't bat an eyelid while offering bribes. They don't get push back from peers either. What irked in India is when you try to do the right thing - i.e. not take the corruption shortcut - my peers would tell me I'm stupid or naive or something to that effect. In the US if I say that I attempted corruption, my peers will probably tell me I'm morally depraved. So you need a critical mass of people that enforce and most people just follow along.
