Pratyush Sinha, who retired as India's Central Vigilance Commissioner this week, said the worst part of his "thankless job" was observing how corruption had increased as people became more materialistic.
"When we were growing up I remember if somebody was corrupt, they were generally looked down upon," he said. "There was at least some social stigma attached to it. That is gone. So there is greater social acceptance."
Transparency International, the global anti-graft body, puts India 84th on its corruption perception index with a 3.4-point rating, out of a best possible score of 10.
New Zealand ranks first with 9.4 points and Somalia last on 1.1 points.
The campaign group has said that each year millions of poor Indian families have to bribe officials for access to basic public services.
Sinha told a Delhi-based newspaper in an interview published on Tuesday that 20 percent of Indians were "honest, regardless of the temptations, because this is how they are. They have a conscience. "There would be around 30 percent who would be utterly corrupt. But the rest are the people who are on the borderline," he said, adding that corruption was "palpable".
Sinha said that in modern India "if somebody has a lot of money, he is respectable. Nobody questions by what means he has got the money."
Recent corruption scandals in India have focused on construction projects for the Commonwealth Games that open in New Delhi next month, and alleged tax evasion in the lucrative Indian Premier League (IPL) cricket tournament.
India is also regarded as a hotbed of illegal betting syndicates, with gamblers and bookmakers involved in "spot-fixing" - the gambling that has engulfed the current Pakistani cricket tour of England.
Prime Minister Manmohan Singh has often spoken out against the damaging effect that bribes, extortion and fraud have on all levels of life, and warned that the problem threatens India's future economic prospects.