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PM Modi has cleared a cabinet note to amend the Prevention of Corruption Act to bring safeguards that critics believe water down the law.
A rule that requires agencies to ask for the government's sanction before investigating officials will be restored.
In 2014, the Supreme Court had described the rule as "invalid and unconstitutional", saying that punishing a corrupt official, however senior, is necessary and the status of a public servant does not qualify anyone for protection.
The IAS (Indian Administrative Service) lobby was adamant that the clause that protects officials be brought back.
Officials say the changes will help in the ease of doing business; honest officials will not be deterred from making policy decisions and will be protected from harassment.
The court had held that the law cannot discriminate between public servants on the basis of their rank.
When the changes are in place, the senior management of corporate houses will be held liable only if their "consent, connivance and complicity" is proved in court.
In the current rules, if a company is held guilty of bribery, then the head of the organisation is taken as guilty.
The Prime Minister has approved the scrapping of the stringent 'undue advantage' clause. It was argued by a parliamentary panel that the term "undue advantage" was too wide and allowed misuse by enforcement agencies.
The amendments to the Prevention of Corruption Fund have to be cleared in Parliament.
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