Democracy is almost a perfect system in which common people can play an important role directly or indirectly. India is a democratic state. It is the largest democracy in the world. Democracy has many features and characteristics (rule of law, equality, justice, transparency, accountability, promoting individual rights and liberties, etc.). India is also trying to follow these features or characteristics. Democracy is gradually changing its nature day by day. Democracy in present era is not same as it was before. Democracy is redefining its definition. The democracy of India is also changing and facing many problems and challenges. Democracy is a form of government in which people either directly or indirectly participate in the decision-making process through a system of representation involving periodically held free elections. The Democracy of India is considered as the largest democracy in the world. In a democracy, authority is enjoyed by the people or their representatives and people are the final authority in every field of system of governance. However, in modern India, democracy has faced a lot of challenges like social and economic inequalities, poverty and unemployment, Illiteracy, Casteism, communalism, corruption, terrorism, population explosion. It is required to be addressed to sustain true parliamentary democracy in India. This paper tries to examine and analyse the existing democratic system in India & its implication towards the democratic system of the world. It also suggests certain possible measures or institutional reforms in order to ensure a healthy and sustainable democracy for India. I would like to discuss mainly the problems and challenges with some examples that Indian democracy is facing.