The letter writers - calling themselves the Group - warned the Government against the "strong nexus between certain corporates, bureaucrats and power-brokers", which it said posed the "greatest threat to the Indian economy".
"We feel there is no movement in the key reform areas," said the letter, which followed one along similar lines written in January.
"We are talking of corruption that is making life unbearable for the common man and concerns everybody, including us," it added.
Transparency International last year ranked India 87th out of 178 countries on its annual Corruption Perceptions Index.
With an "integrity" score of 3.3 out of 10, India was behind neighbouring China, which was 78th on the corruption index card. In 2009, India was 84th and China 79th.
And though the Group welcomed the proposed appointment of an anti-corruption ombudsman, they said much more needed to be done.
They also lamented the inefficiency of India's judicial system with its backlog of more than 31 million cases, saying that even the most outstanding anti-corruption legislation would be useless if the legal system was not swiftly reformed and made more accountable.
"Fresh investments are not forthcoming at the pace required. Policy uncertainties and delays in approvals are forcing many large corporate entities to seek out opportunities in other geographies" the Group letter said.
Several Indian and international companies, including global steelmakers Posco and ArcelorMittal have had big projects stalled locally because of delays and backtracking in the approval process triggering loss of investor confidence.
"India's focus must remain steadfast on economic reforms and growth in order to reduce poverty and ensure adequate job creation," the letter said.
"These national challenges cannot be solved by urban protests and posturing," the letter said, referring to almost routine unruly and chaotic scenes in Parliament.
Regarded until recently as India's most upright and trustworthy Prime Minister, Singh, 79, is now presiding over the most venal and ineffective administration since independence in 1947.
After his Congress Party-led coalition's re-election in 2009, the soft-spoken Singh has also become India's weakest and least visible leader.
But above all, he has shown himself unable to stop unending multibillion-dollar scams during his tenure.
As well as the corruption fallout from last year's Commonwealth Games and the follow-on US$39 billion telecommunication swindles - for which some of Singh's Cabinet colleagues, MPs and senior civil servants are in jail facing prosecution - the Government has been hit by a wave of new financial scams.
These include the awarding of questionable oil, gas and coal prospecting contracts and the sale of prohibitively expensive government land to favoured parties at throwaway prices.
And though Singh's personal integrity remains unblemished, confidence in his administration's ability to investigate and prosecute these scandals is nonexistent.
"It's a scary scenario that could turn the land of the Mahatma [Gandhi] into one gigantic Gotham City with a flyover to hell" former MP Pritish Nandy said dramatically while demanding the Singh Government's resignation.
After consistent annual growth of 8 to 9 per cent for many years, the economy is rapidly worsening.
In early August, the PM's Economic Advisory Council said business sentiment and investment in India had been hit by scams and corruption.
Presenting the Economic Outlook for 2011-12, the council said graft had paralysed the administration and was "badly hurting" investment.
It concluded that the spectre of corruption had to dissipate before government decision-making revived.
Galloping inflation and spiralling food prices were adding to the overall economic gloom.
An indication of the loss of confidence in Singh's Government comes from leading Indian businessmen such as Rattan Tata - owner of Jaguar-Land Rover - and other oil, telecommunication, information technology and engineering and heavy goods manufacturing czars preferring to invest overseas than at home.
They believe that although less profitable, overseas investments are free of problems created by corruption.
Smaller businessmen, industrialists, bankers, traders and financial speculators also say unabashed corruption at all levels right down to on-site inspectors has made the cost of doing business in India prohibitive.
In an indictment of Singh's administration many said they had spent more money on paying bribes over the past two years than in the previous 40.
