A Washington-area private investigator hired to help probe allegations of Indian government corruption says in court papers that he was offered $500,000 to say he had found nothing to implicate Prime Minister Rajiv Gandhi and his family.

The investigator, Michael J. Hershman, president of the Fairfax Group of Annandale, said in an interview that he considered the offer, which he alleged was made by Chicago lawyer Philip S. Wolin in a September telephone call, to be "improper" and rejected it.

Hershman said Wolin had told him earlier that a group of Indian businessmen who said they were acting on Gandhi's behalf were interested in making the offer.

One of the businessmen is Ali Siddiqui, who runs a New Delhi computer training business with Adil Shahryar, a boyhood friend of Gandhi, special correspondent Nilova Roy reported from India.

Shahryar, convicted on federal charges of firebombing a ship to collect insurance, was serving a 35-year prison sentence here that was commuted by President Reagan in June 1985, the day Gandhi arrived in Washington for a visit.

Gandhi said at the time that he hadn't requested the commutation but felt Shahryar had been "wrongly imprisoned."

Hershman, a former investigator for the Watergate committee and the State Department, declined to say what, if anything, his investigation found about Gandhi in its probe of alleged violations of India's foreign currency laws.

A spokesman for the Indian government declined to comment.

Wolin denied in a telephone interview from Chicago last Friday that he offered Hershman $500,000 to write a letter exonerating Gandhi or that he told the investigator his clients were acting for Gandhi. "That's just not true," he said.

He said he met with Hershman and asked him to write a report to an investigating commission, perhaps for a fee, to settle the controversy about alleged currency violations that involved the group of Indian businessmen who are his clients. He said he didn't remember Siddiqui's name.

Wolin said he told Hershman at the meeting "if one of the reasons you're not complying {with the commission} is because your fee hasn't been paid, maybe something could be arranged."

Asked why his clients would be willing to pay Hershman fees owed by the Indian government, Wolin said: "I don't want to get into that." He said Hershman demanded $5 million to write a report.

Hershman said he picked $5 million because he felt "no one would accept such a proposition and I wanted to see how far they would go."

The Gandhi administration has been plagued in recent months by corruption allegations involving alleged kickbacks on defense contracts, as well as the alleged currency violations Hershman investigated for the office of Finance Minister V.P. Singh.

Singh, a Gandhi critic, was later transferred to the Defense Ministry and has since resigned.

The hiring of the Fairfax Group by Singh's top enforcement aide to probe alleged currency violations by Indians abroad has caused controversy.

A government investigating commission appointed by Gandhi reported two weeks ago that the Fairfax Group was hired outside normal channels and did little more than serve as a post office to forward documents to Indian officials.

Opposition members of Parliament attacked the investigating commission's report as an attempt by Gandhi to deflect attention from the original corruption allegations.

Hershman made the claim about the $500,000 offer in papers he filed last Friday in U.S. District Court here in answer to a suit brought in October by a Wolin client, Lateef M. Khan and the Indian Non-Resident Association.

That suit alleged that Hershman and his firm violated federal law by disclosing federal income tax information about Indian businessmen, including members of the association, residing in the United States.

Hershman said in the interview that Wolin first called him in August, asking for an appointment to discuss hiring him to represent an Indian client unrelated to his financial investigation.

Wolin arrived for the meeting last Aug. 24, according to Hershman, with his law partner, while Khan, who lives in Chicago, and Siddiqui remained in a car outside the office. Khan and Siddiqui later joined the meeting, Hershman said, and Siddiqui said he had known Gandhi for years.