"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)."