Illiteracy means the lack of Reading, Writing and Arithmetic (3R’s) skills. It is the lack of minimum capabilities needed to function effectively in a society. According to H.M. Philips “an illiterate person has hundred enemies such as epidemics, hunger, disorder, humiliation and many others”. Therefore, illiteracy is a curse to humanity. As the socio economic condition of a nation mainly depends upon the education of its general people, illiteracy must be removed by any means. Unfortunately, India has got a quite unsatisfactory socio-economic condition due to the high rate of illiteracy among her people. About 25 percent of population is still illiterate in India. This can be a threat to a democratic country of 21st century. It is because dissemination of knowledge is the motto of today’s society. Hence, there is an urgent need to identify the various consequences that are caused by illiteracy so that we can motivate each and every individual to join their hands together to eliminate illiteracy from the Indian democratic society. This paper is an attempt to focus on the social and economic consequences of illiteracy in India.