The official opening of the Commonwealth Games is looming, and the multi-billion dollar event that was expected to elevate India's profile on the world stage has instead turned into a nightmare.

Allegations of corruption, nepotism, incompetence and sheer negligence have risen to the forefront, potentially damaging much sought after foreign investment.

But those who know India are not surprised. The economic superpower is built on shaky foundations and has a conflicted corporate culture - modern ideas hand-in-glove with outdated business traditions.

India has spent around $5 billion on the Games - almost nine times its originally estimated budget of $500 million. The Games have been criticised as being the most expensive ever and, in a country where over 800 million people live on less than $2 a day, there is outrage even amongst the nationalists.

Bestselling Indian author and one of Time's 100 Most Influential People, Chetan Bhagat, was an avid supporter of the Games when it was first announced, but has since been urging the public to boycott it.

He says the Games should be boycotted because the corruption and nepotism that has pervaded the event should not be supported.

"It is corruption or connection, if you have connections, you go further in India, not only in business, but even at an individual level," he said.

Although disappointed at the murky state of affairs in India, Mr Bhagat is pleased that these issues have been exposed and made global, lending a voice to those dominated by the ever widening gap between the haves and have nots.

"I want the foreign media to support us because ultimately it is not about India versus Australia or anything; it is about one sixth of humanity which is suffering under corrupt leadership."

One of India's leading newspapers, India Today, undertook an expose on the Games and revealed internal documents which showed organisers spent $80 on one roll of toilet paper, $125 on a first-aid kit and $61 on a soap dispenser which retails in India for only $2.

The controversies do not end there. On August 5, Commonwealth Games Organising Committee (OC) treasurer Anil Khanna handed in his resignation in the wake of allegations that that his son's company, Rebound Ace, had been awarded a contract to lay 14 synthetic surfaces at the R.K. Khanna Tennis Stadium.

Anil Khanna's resignation came a few hours before an Organising Committee executive board meeting convened to discuss the corruption scandal that has rocked the Games.

Beleaguered Indian Olympics Association chief Suresh Kalmadi has also been caught in the eye of the corruption storm. Suresh Kalmadi, TS Darbari (OC joint director general) and Sanjay Mohindroo's (OC deputy director general) are all named in investigations into alleged irregularities in services provided during the Queen's Baton Relay in London.

Investigations showed that a little-known UK company, AM Films, was paid around $500,000 for its "services" without a written contract.

Mr Kalmadi defended the controversial payments made to the London-based firm and said the company was paid for its services which included items such as portable toilets, ambulances and barricades that had to be put in place for the Queens Baton Relay.

Following what was widely labelled as a "leakage" - India's euphemism for rampant corruption - sports minister MS Gill issued a stern warning saying "prompt and appropriate" action will be taken if any irregularities are brought to the ministry's notice.

Almost all sectors of India's officialdom are riddled with corruption and graft.

The head of the philanthropic Byrraju Foundation, which promotes rural development, Verghese Jacob says around 25 per cent of all costs go to corruption.

In 2009, Transparency International ranked India 84th out of 180 countries in its Corruption Perceptions Index. It was ranked behind China which placed 79th, and well behind advanced economies such as Japan at 17th and Australia at 8th.

It is little wonder then that, not only has India exorbitantly exceeded its budget, but there have been numerous delays in projects.

With corrupt officials siphoning money every step of the way, projects often get delayed, if not derailed, and costs are continuously raised.

Fortunately, after decades of political inertia and underinvestment in infrastructure, some of India's politicians have awakened to the magnitude of the country's corruption crisis.

In October 2006, officials implemented a new right-to-information law that requires both state and central governments to divulge information about expenditures, contracts and hiring to any citizen that requests it.

However, nepotism remains a unifying theme in India's business culture, one that transcends the barriers of region, religion, caste and creed.

India is famous for its dynastic attitude, not only in politics, but also business. The core of nepotism lies in the structure of Indian society, and family has always been the very fulcrum of this society.

Individuals are placed in positions of power, even if they are unmerited candidatures. This form of power and fortune favouring family has been prevalent in the Commonwealth Games.

In an investigation, Indian Express revealed that the Organising Committee includes around 38 of the top brass who are related to one another.

General administration and workforce joint director N P Singh attributes the staggering numbers to sheer coincidence.

"It is a coincidence that so many of them are inter-related," Mr Singh said.

OC vice chairman Randhir Singh has four nephews on the committee, out of which three of them - Amar Singh Wazir, Yadu Raj Singh and Tejinder Singh - work in the Commonwealth Games Association Relations, directly under Mr Singh.

Bharati Singh Rao, the daughter of a Congress MP from Gurgaon (Rao Inderjit Singh), was hired last year as a director.

Boxing Federation secretary general P K Murlidharan Raja's son, Vivek Raja, was also hired as a director in the OC's Workforce division, and the list goes on.

Some of the leading Indian-owned companies also have nepotic characteristics.

One example is ArcelorMittal, which is headed by Indian steel tycoon and one of the world's richest men Lakshmi Mittal, and has a board that includes his son, Aditya Mittal, and his daughter Vanisha Mittal, who was made a board member at the tender age of 23.

Another is Reliance Industries, founded by Indian business baron Dhirubhai Ambani, which was divided and handed down to his two sons, Anil and Mukesh Ambani.

Some of India's greatest business leaders, in the sunset of their lives, think not of their legacy but rather of dividing their kingdom amongst their children.

This defining character of the Indian business arena places great emphasis on an individual's inherited name, often predetermining an individual's station in life.

The prevalent nepotism often sees unqualified people at the reigns of multinational conglomerates, hindering social advancement and preventing India from unlocking its true economic potential.

Billionaire Ratan Tata, founder and chairman of multinational diversified firm Tata Group, is an exception to the rule.

In August this year, he broke away from tradition among Indian family-run conglomerates and launched a global CEO search.

Ratan Tata's half brother and current managing director Noel Tata was often predicted to be the next-in-line to the throne, but the rumours subsided when the chairman launched the international talent search.

In 2003, Nimesh Kampani, then-majority owner of an Indian securities joint venture with Morgan Stanley, JM Morgan Stanley, offered some publicly loaded advice by saying, "my son will inherit my wealth but not necessarily my chair. He may, but only if he proves himself capable."

These initiatives are slowing starting to see the nepotism-driven business model weaken.

As foreign investors continue to flood India, bringing with them money, corporate governance and international standards of professionalism, India is starting to take heed.

But the deep-rooted tradition will take decades to erode before once-favoured scions will be passed over by CEOs and chairmen in favour of professionalism and most importantly, egalitarianism.