Every issue that our society faces is like a link of a chain. Each issue is connected to another, either directly or indirectly. The chain of issues in this society that we live in, the strongest link of that chain is illiteracy. Illiteracy is the mother of all problems, and it is also challenge to democracy. We can see the many challenges to democracy like poverty, population growth, regional disparities, regionalism, communalism, violence, linguistic problem and illiteracy. In this background our study focused on the basis of selected 25 agriculturalist and 25 labourers in Hassan taluk of Hassan district of Karnataka state through simple random sampling method and conducted direct interview with on interview schedule. Data was collected and classified and then it is analyzed in this present study. The present study aims to find out the illiteracy as a challenge to democracy. The study results show that people are not aware of democratic principles and values due to reason of illiteracy.