It was the formidable chief of US Federal Reserve Alan Greenspan who coined the term "irrational exuberance" to describe the stock market boom of the late-1990s. It's a term that constantly rings in my mind when looking at the journey of India between this year's Republic Day and Independence Day.

We entered the year on an almighty high. The economy was on a roll with GDP growth at eight per cent plus, inflation was at an all-time low, consumer confidence was at an all-time high, the connectivity revolution was in full swing, a network of highways promised to link the four corners of India and we were even talking peace with the General. The more optimistic of our politicians were even hazarding a promise to make India a fully developed economy and a world power by 2020.

It has taken less than seven months for the mood to sour. The mood of buoyancy and headiness has been replaced by a blend of caution and dejection. The low-tax regime of the past seven years has been decisively reversed. There is a two per cent Red Cess that everyone, including the person who imposed it, knows is going to fall into a bottomless pit.

Inflation has soared to 7.6 per cent, food prices are up and the cost of fuel is soaring. The average Indian has less money to spend on himself and his family. To cap it all, strikes have returned with a vengeance to the cities and the merchant bankers have begun the inevitable process of downgrading India as an investment destination. To think that six months ago we were revelling in a Goldman Sachs report announcing that India will be among the five largest economies by 2050.

If this isn't bad enough, and depending on how you view it, the quality of public life has sunk to new depths or touched new farcical heights. You have a railway minister whose priority is to build bridges to connect his sasural, an HRD minister who wants to turn school kids into ideological fodder for his towering political ambition, a home minister whose sartorial pride is in inverse proportion to his understanding of issues and another minister who wants reservations in the private sector.

Then there are the blackguards who have wormed their way into ministerial bungalows because the electorate wasn't decisive enough. One ran away to escape a warrant and ended up in judicial custody, another has cases of murder and extortion and one is known to have links with the ISI and the underworld.

Presiding over them is an honourable man who, we have been reliably informed, rises early and sleeps early, goes through more files in a week than the previous prime minister did in his entire tenure and is so blessed with humility that he doesn't want to be seen off at the airport and his photograph decorating every dreary government advertisement.

Manmohan Singh is an upright soul, an educated man and a man of integrity. Unfortunately, he is also a weak man whose weakness has rubbed off on the country. His innate decency has been translated into political-speak as implying license. No wonder Sonia Gandhi can travel to Tamil Nadu and peremptorily announce a grant from the Prime Minister's Relief Fund. Maybe that's why Manmohan Singh doesn't want the mandatory prime minister's photograph in every government office. Maybe he isn't really the prime minister!

Whatever the truth, it is an inescapable law of India that when the Centre is weak, the satraps start misbehaving. It happened under the Moghuls, it happened under Chandra Shekhar and I K Gujral and it is happening now. In Punjab, a beleaguered Amrinder Singh decided he would do his own thing on water, never mind the consequences for India. In Manipur, an equally harassed Chief Minister Okram Ibobi has enacted legislation that threatens to unsettle the whole of the Northeast and give a fillip to insurgency. And seizing the moment, the CPI-M in West Bengal has unveiled a plan to refer village disputes to Red kangaroo arbitration boards.

If this is what administrations run by responsible national parties can do, we lie in nail-biting anticipation at what the state governments in Bihar and Jammu and Kashmir are considering.

The picture of a resurgent India has yielded way to a vulnerable India. Some gunrunners and extortionists in Iraq hold three poor Indian workers in Iraq hostage and demand a ransom of some five million dollars. The external affairs minister calls a spade a spade and is told to busy himself with other worldly concerns.

The operations are passed on to India's first Muslim League minister at the Centre. He contacts every reactionary mullah in the Middle East theological loop for crisis management tips, unilaterally reworks policy to call the Americans an "occupation" force, and reposes faith in a mediator who seems more anxious to get a percentage from the deal. The demands are upped and upped till it reaches its macabre high-point: a demand for a performance by Amitabh Bachchan and Asha Parekh!

Did someone say India is a nuclear power that seeks permanent membership of the UN Security Council? If Kandahar was a national tragedy, the hostage crisis in Iraq is a monumental farce. No wonder the Americans have lost interest in us, the European Union is offering gratuitous advice on how to handle Kashmir, and Bangladesh is going berserk on our eastern borders. But why should we complain? Even as well-connected a civil servant as Wajahat Habibullah believes that India should leave its conflict-resolution to others who are better placed and better equipped. At this rate, Musharraf will soon acquire the self-confidence to resume his jihadi operations in Kashmir.

Every nation gets its comeuppance. Perhaps we were guilty of "irrational exuberance" in imagining India had finally arrived. This Independence Day we are back to normal. The party is over; the bad days are back. We have been shown to be a paper tiger. Manmohan Singh is right. We need all the "caring" we can muster before we are wheeled off to the ICU.