"There is merit in setting up a high-level committee, including distinguished jurists and former cabinet secretaries, heads of CVC and CBI to examine the lacunae in the existing architecture for combating corruption," he said in a note to Prime Minister Manmohan Singh.
Ahluwalia has written a detailed 14-page note to the caretaker Prime Minister on the issues raised by the latter during an internal meeting of the Commission held on April 30.
The committee to combat corruption, he said, should recommend additional initiatives to deal with the problem while ensuring that "administration is not hamstrung".
Elaborating his point he said: "The Prevention of Corruption Act has portions which could easily make officials acting in good faith vulnerable to charges of corruption even if they have never taken any money or favours."
He further said petty corruption in the form of officials extracting money and large scale corruption arising from manipulation of government contracts have increased and has undermined the trust of people in the government.
In his candid letter, Ahluwalia admitted: "We have not been successful in many areas, for example in pushing the need for structural reforms in railways...ports, corporatisation, faster alignment of energy prices with world prices, introducing flexibility in labour laws and introducing operational autonomy in PSUs."
Referring to the issues concerning the relevance of Planning Commission in a market based economy, Ahluwalia said, "We..need to improve the quality of interaction in the (meets of) National Development Council (NDC)."
Ahluwalia regretted that the Commission has not been able to implement the idea of NDC meetings moving away from "transitional dais based format in Vigyan Bhawan to a round table format...unfortunately we don't as yet have a hall which accommodate the numbers that would be involved in such a format."
The NDC is the highest planning body of the country headed by the Prime Minister with all chief ministers and Cabinet ministers on its board. It takes call on important policy issues, including the five year plans.
Observing that Commission is "most handicap in absence of domain knowledge specialist", Ahluwalia made a case for hiring consultants and domain specialists on competitive remuneration to advise the Commission.
"The total package is....not attractive for recruiting younger people from outside. It is attractive only to very young people wanting a stint in the government and to retire civil servants and academics."
The Commission can make a difference only if becomes a genuine knowledge hub, Ahluwalia said, adding that "we could try to develop platforms for encouraging knowledge flow with active involvement of outside domain specialist in certain areas."