2. Almost all Indian politicians are corrupt. http://en.wikipedia.org/wiki/List_of_politicians_in_India_ch... Now, it's one thing to get away with a crime but it's a whole another thing to still be active in politics after your crimes are exposed. E.g. Lalu Yadav was involved in a scam costing government ~190MM. He later became Railway Minister and he is still active. Compare this to US. Eliot Spitzer, a generally honest man, had to quit politics after his sex scandal came out.
I grew up in India and I have personally seen how the rich people have used money to circumvent the law.
This lack of enforcement against rich people leads to a situation where common people have no respect for the law. And that is why corruption is so rampant in India.
IMHO, A law enforcement similar to how it's in USA, will do wonders to India and it's economy. Though I should add that before we adapt strict law enforcement, we have to revamp our ridiculously outdated laws [http://en.wikipedia.org/wiki/Indian_Penal_Code]. E.g. It was only in 2009 when the law banning gay people was scrapped down.
I'm obviously not privy to the inner workings of Indian politics, but I can give you a possible sequence of events. One of the reasons that the food is rotting is because of poor storage. The government has decided that jute, and only local jute, can be used to make bags to store the grain. Foreign jute or other materials, such as plastic, are not permitted.
It's very possible that the local jute industry was given protection by the government because they bribed the appropriate civil servants/elected officials. Neither the bribers or the bribees will ever face any sort of prosecution for their actions, despite the fact that giving or taking bribes is clearly illegal.