Most Indian population could not get benefits of the economic development brought by the economic liberalisation, and one of the reasons is the flawed administrative system of Indian democracy. Even, the implementation of 73rd and 74th Amendments and Panchayati Raj System could not bring the desired benefits to the rural people as all provision of these Amendments were not implemented and socio-political factors. In this research article , the Gandhian philosophy of Gram Swaraj and its importance in contemporary Indian democracy has been briefly discussed. Gandhiji introduced Gram Swaraj as a concept of his ideal of stateless democracy and wanted real democracy to work in India. It is a practical embodiment of truth and non-violence in the realms of politics, economics and sociology and offers an effective remedy for many of the political ills of contemporary political systems. The concept of Gram Swaraj is not political; it touches all aspects of life: cultural, social, economic and ecological. It provides an ideal non-violent social order in which self-reliant, self-sufficient and self-governing villages function independently in vital matters leading to holistic village development.