NEW DELHI, INDIA - India's prime minister has been the central figure behind 15 years of rapid economic growth - but he believes corruption is now holding back development and threatening the nation's future prospects.

The challenge that Manmohan Singh faces was underlined by the recent refusal of many judges to reveal details of their wealth, despite orders to do so by their senior colleagues in the Supreme Court.

The row is seen as a test case in India's fight against corruption, with the judges' reluctance to prove their own transparency reflecting a culture of privacy and vested interests that many consider beyond reform.

In a major speech last week, Singh used strong language to describe the damaging effect that bribes, extortion and fraud have on all levels of life in India.

He admitted that graft meant infrastructure projects were late, over-budget and often poor quality, and he labelled India's opaque business practices as "a fertile breeding ground for the evil of corruption."

"The pervasive corruption in our country tarnishes our image," he said, warning it "discourages investors who expect fair treatment and transparent dealings when dealing with public authorities."

The difficult task ahead was amply demonstrated two days after Singh's speech, when judges of only two of India's 29 states agreed to declare their assets.

Many said releasing the information would leave them vulnerable to attack by aggrieved litigants.

"What message are these judges sending out to the nation?" asked Anupama Jha, Indian director of the Transparency International corruption watchdog.

"Judges were once greatly respected and now these questions about judicial corruption have lowered their status. It is a sad situation," Jha told AFP.

Last year, India, the world's second-fastest growing economy, slipped further in the watchdog's corruption index from 72nd to 85th in a list of 180 countries.

Singh - who instigated the country's economic boom with reforms launched in 1991 when he was finance minister - rose to be prime minister in 2004 and has retained his reputation as the "Mr. Clean" of India's grubby political scene.

But his ruling Congress party was re-elected in May with at least 40 sitting MPs facing criminal cases, according to the Indian Association for Democratic Reforms, and other parties are similarly troubled.

For millions of ordinary Indians, petty extortion is an everyday curse, with car drivers often stopped by police and forced to pay cash bribes or face a lengthy examination of all their personal identification and legal documents.

Many Indians resent such "skimming" - perhaps 200 rupees (five US dollars) a time - but accept it is part of life.

"Corruption is very much in our blood," said Alok Srivastava, project director in the privately-run Centre for Media Studies think-tank in New Delhi.

"It is a good thing to go after systemic corruption and the big fish but at the same time one must remember that at the grass roots poor people even have to bribe officials to collect wood for their fires."

Srivastava and his team surveyed 22,700 households last year and concluded that one in three families living below the poverty line had had to hand over bribes to access basic public services such as water and electricity.

A corporate scandal earlier this year, in which outsourcing giant Satyam was revealed to have been falsifying its accounts for years, proved that India's new business entrepreneurs are also far from blameless.

After Singh's speech, several national anti-corruption agencies set to drawing up a blueprint for action - including the formation of a new unified taskforce with a one billion rupee (20 million dollar) budget.

Among the promised initiatives are special courts for skimming offensives, more powers for anti-fraud agencies, and increased protection for whistle-blowers.

But India's bureaucracy is as slow-moving and vulnerable to corruption as other parts of the public sector, and Central Intelligence Agency spokesman Harsh Bhal conceded it may be some time before any such plans came to fruition.

"They are still at a pre-proposal stage," he said.