For the first time in the Manmohan Singh government's six years in power, there is a pervading sense of negativism in the atmosphere. Not even when the Left withdrew its support in 2008 on the India-US nuclear deal was there such a feeling of despondency about the government's and the nation's prospects.
It isn't that the government's majority is threatened in any way. In fact, as a political force, the opposition does not present a serious challenge because of the Left's continuing weakness and the Bharatiya Janata Party's (BJP) internal problems. The government's discomfiture, therefore, is the result of self-inflicted wounds.
This, despite, India's rising stature in the comity of nations, reflected in the succession of year-end visits by leaders of all the five permanent members of the UN Security Council - the big powers who influence global thinking and actions.
The political downslide can, however, be traced to summer when the escalation of violence in Kashmir Valley, which lasted almost continuously for three months, put the government on the defensive. Suddenly, it appeared clueless before a mob of determined stone-throwers, whose rain of missiles caught the Goliath of an administration flat-footed.
It was a matter of luck for New Delhi that Pakistan's own internal troubles and the growing perception in the international community of it as the home of terrorism made it difficult for Islamabad to exploit the unrest in the valley although it did bring the subject up before the UN to India's considerable annoyance. Iran too chipped in by equating Kashmir with Palestine and seeing a Zionist "conspiracy" in both the places.
But, by and large because of India's growing prestige, the world mostly ignored the outbreak in Kashmir although 108 lives were lost in police firing in 100 days of street violence. It is this unacceptably high level of civilian casualties which emphasised New Delhi's ham-handedness and the ineptitude of Omar Abdullah as chief minister.
The tragic deaths showed, yet again, that the security forces have not been able to develop effective crowd-control methods. They remain trigger-happy instead of using more humane measures like water cannons, chilli powder and rubber bullets.
With the onset of autumn, the stone-throwers vanished from the streets. The level of Maoist violence too has shown a declining trend. Except for the tragic death of a child in a terror attack in Varanasi by a home-grown militant outfit, the Indian Mujahideen, India hasn't experienced any Pakistan-sponsored terrorism on the scale of the Mumbai mayhem of November 2008.
Either there has been considerable improvement in the country's intelligence services where Pakistan is concerned, or the sponsors of terror in that country are waiting for the worldwide outrage over the Mumbai massacres to die down before initiating any fresh onslaughts.
However, if there is a no sense of relief for the government from these developments, the reason is that it is facing allegations of sleaze on a wider scale than ever before. So much so that Congress president Sonia Gandhi has had to acknowledge the shrinking of the country's "moral universe" because of growing instances of "graft" and "greed".
The government has only itself to blame for this demoralizing plunge into the cesspool of corruption. The worst case undoubtedly is that of former telecom minister Andimuthu Raja, who stands accused of having robbed the exchequer of a gargantuan Rs.1.7 lakh crore ($40 billion) because of dubious deals in the allocations of second generation spectrum.
But while Raja's alleged misdeeds may not cause too much surprise because of the less than wholesome reputation of his party, the DMK, what has hurt the ruling Congress most is that Prime Minister Manmohan Singh's name has been dragged into the controversy.
Even if his personal integrity remains intact, his handling of a cynical coalition partner like the DMK has been seen as weak-kneed. By virtually allowing Raja a free hand for more than a year despite mounting evidence of his complicity, the prime minister has damaged his credibility as the purposeful leader of a team.
By the time Raja was asked to resign, the Supreme Court was asking why he had not been interrogated by the Central Bureau of Investigation (CBI), and the Comptroller and Auditor General (CAG) had published a damning report on the scam.
Raja was not the only accused. Two others - both Congressmen - had to resign in connection with other acts of suspected malfeasance. One was Maharashtra Chief Minister Ashok Chavan and the other was Commonwealth Games Organising Committee chief Suresh Kalmadi.
Chavan was implicated in a housing society scam in Mumbai in which bureaucrats, including defence officials, were involved. Kalmadi's alleged sins were about the siphoning off of funds related to the Games.
Even if action has been taken in nearly all these matters, they have not dispelled the murky atmosphere of venality, which has enveloped the government and the ruling Congress. One reason, however, why the BJP has been unable to derive much advantage from the Congress' discomfiture is that the BJP's own chief minister, B.S. Yeddyurappa, has become involved in questionable land transactions in Karnataka.
But for the average people, the scene is reminiscent of the closing days of the Rajiv Gandhi government in 1989 when the Bofors howitzer scandal had tarnished the then prime minister's name and spread the impression of the country sinking into a morass of corruption.
The fact that Chavan had to resign and that Yeddyurappa has barely survived a similar fate also suggests that the entire political class is tainted, an aspect of life which is confirmed by the reported rise in the number of MPs with criminal background.
To compound the Congress's misery, the sudden rise in onion prices, a feature of the economy which has destabilized earlier governments, has underlined its poor handling of the food and agricultural scene. Either it is being castigated by the Supreme Court for letting wheat and rice rot in the godowns, or allowing hoarders to hide essential items like onion in the hope of skewing the market at a time of scarcity.
The party has blamed agriculture minister Sharad Pawar for the mess. But the fact that Pawar had earlier sought to be relieved of some of his portfolios showed that the Congress had chosen the wrong man for such an important job - as it did for the telecom ministry.
The only ray of light in this depressing environment has been provided by the electoral success of Bihar Chief Minister Nitish Kumar. There are two reasons for the celebrations. One is that Nitish Kumar has not featured in any scandal. The other is that his victory is mainly the outcome of his fruitful efforts relating to development and law and order, which have enabled the state to emerge from the "jungle raj" of Lalu Yadav's years in power (1990-2005).
On the external front, Barack Obama's endorsement of India's claims for permanent membership of the UN Security Council shows that the world now believes with the US president that India is no longer a rising power - it has already risen. This was also endorsed with visits by leaders from Britain, France, Russia and China, although China pointedly refused to endorse India's Security Council aspirations, unlike the four Western powers.
However, even as India's relations with major powers and key regions become multi-dimensional in sync with its growing economy, there is no corresponding warmth in India's relationship with its two less than friendly neighbours, Pakistan and China. While there are no signs that Pakistan intends to act determinedly against the anti-Indian terrorist groups operating in the country, China has shown that it wants to create new areas of tension like Arunachal Pradesh and Kashm