India is the land of diversities. Here dwell the people of various religion, races and traditions. These diversities often vent out as a demand of states in different area of the country. In one side there are a higher income group living a luxurious life and on the other hand there are also a group of people who scarcely earn the income to survive. Almost 70 per cent of the total population is living in the villages but there is still a very poor state of development in the villages. There is no sign of development, no proper facility of education, health, electricity and roads. To make the democracy meaningful and welfare oriented we need the affective decentralisation of democracy through the panchayati raj institution. Democracy is the fundamentally decentralised system of governance. We have several problems of education, poverty, lower income and unemployment.