IMO, the problem is systemic. We, as a culture, (largely and yes, I'm at the risk of stereotyping) do not want to be accountable to ours or hold accountable others to their actions. We need NGOs to fix things, we need judges to over-reach and get into Governance; In Mumbai when there are floods, there are typical stories about how the real Mumbaikar stood up to help their neighbours, year after year; however, no one is asking where the heck is the Governance, why the heck does it repeat every year, what has the Government done since the last few 100 times the same event had occurred.
We reach for quick fixes with an outlook, we will figure out a lasting solution the next time; and sometimes just trusting providence that it wouldn't happen the next time. I believe there are two key perspective that needs to be brought into finding the real solution:
First, we need to find a set of people who would govern better. This implies educating the rural and urban masses, the intent to vote every time and on every issue and actually do it and then hold the elected rep to their promises. This doesn't mean things would change quickly, but it is the toughest process we need to go through.
Second, what we need to legislate and then govern; in my view, the smaller-set of items we legislate, the easier it becomes to govern and also for the people to hold the politicians responsible for those. So, the answer may not be as simple as "free market" or "less bureaucracy" or "less constraints and regulations" but sure seems a good place to start. It just seems intuitive to me :-).
Instead, we go the opposite, we have so many rules and laws and continue to legislate more. We try and replace our personal accountability and integrity with public laws and rules. Then the set of laws becomes so muddled that its implementation in a large and diverse country like India, with so many sub-cultures, becomes impossible; and becomes out of reach of common man and we look at someone else to help us get there - which is why we've so much of NGO and judicial activism. The problem with this approach is, it is inherently not sustainable... It is so dependent on the gray-areas and how the guy in the chair is going to interpret it. And how the next guy in the chair will over-turn it !
On a side-note, although I wasn't a great supporter of Kejriwal in their Lokpak incarnation, I do believe what he has decided now, is more sensible and the only way to go in a democracy. There is only so much awareness etc you can create in a revolution and being outside the system. The changes had to come, by being within the system - Anna Hazare and co, need to be part of the system of governance to change it. They cant be outside all the time and point what is wrong and add yet another piece of legislation to make it work. I'm pretty certain that Kejriwal is going to fail spectacularly in the elections, but I really hope he is in it for the long haul...
The systemic changes are tough and take a long time, but that is the only way to sustain it without quick fixes. Not saying quick-fixes aren't needed; every time we make a quick fix, we need to see what is the systemic change we've made to alleviate or eliminate the pain; the pain that the root-cause had created, in the first place.