Initially my website worked well in webmaster tool and the number of indexed URLs was rising but now it's stuck at 1657. My website is an article directory and most of the content is duplicate. But I can't understand why were the URLs increasing initially if this is due to duplicate content.
Google only index which google think it's valueable contents. And, if less pageview generated from that page, it will be excluded from index in later time too.
It is possible that google stop indexing your pages if they are duplicate content. The googlebot will only grasp and index what it takes as original. And the rest maybe be left aside.
if yours is an article directory, then Google maybe understands that you have other means of publicizing your site and you do not require search traffic for articles inside your directory site. here, Google will, maybe, index you as an article directory, so when a user searches for list of article directories, then your site will come up in that search result list. i am not sure of this. experienced users might be able to confirm this. i don't think duplicate content is the issue here. there are hundreds of websites and blogs having duplicate contents, Susan Moskwa, Webmaster Trends Analyst already said in Webmaster Central blog, there is no penalty for duplicate content. Read what she wrote:
Google is indexing only original content if you have allot of tags will be a problem because you will have duplicate content also google is more slow in indexing a website because of the quantity of new sites. Also you have to link your pages to other in order that google find it more easy.
Same issue with me. My webmaster also not showing all the indexed pages.Indexed URLs are less then Total Number of URLs.