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Hazare is currently touring the state to campaign for a strong Lokayukta Act for Maharashtra.
"All the MLAs, MPs, ministers and the bureaucrats and their subordinates are the servants of the common people," he said, adding that in reality the situation was opposite.
In the backdrop of drought in parts of Maharashtra, he alleged that the state spent crores of rupees on rainwater harvesting, but the schemes led to "money harvesting".
Piped water schemes of the Centre too failed because of the corruption of few people who had political patronage, he alleged.
New irrigation projects are launched with great fanfare but they remain incomplete, he added.
"We demand a white paper on water conservation, piped drinking water schemes and irrigation projects," Hazare said. He said the same situation prevailed in the cooperative sector, with the District Central Co-Operative banks being in the hands of a few powerful political leaders who "loot" the banks.
Most of the cooperative sugar factories are defunct, and grabbed in auctions by the original promoters at throw-away prices, he alleged, adding that Co-operation Minister
Harshawardhan Patil was responsible for this, and he must resign. If Patil did not resign, an agitation would be launched, Hazare threatened.
If the Central and state governments failed to bring in strong Lokpal and Lokayukta Acts, an anti-government mass awareness movement would be launched ahead of the 2014 general elections, and the ruling party at the Centre would meet the same fate as the one it faced in the recent Assembly polls, Hazare said.