Corruption is analysed by addressing the interrelations between the moral and political economy regulating state-based welfare provision in Jharkhand, India. On the one hand, the article focuses on the rural elite to show that ‘corrupt’ practices are not just guided by financial utility but also by non-material interests, underpinned by a multivarious moral economy. On the other hand, the article shows that the poorest in the rural areas (adivasis or Scheduled Tribes) keep away from the state, seeing it as beyond the moral pale, and instead resurrect an alternative sovereign structure. The adivasi perspectives are influenced by a political economy of historical experiences of the state and interrelations with the elites. The paper concludes that a particular political economy is intimately connected with a moral economy, and that transformations in political economy affect the moral economy.