The word and philosophy of Gandhian Marxism appear to be oxymoron, while Gandhiji espoused non violence, Marx advocated class disappearance by armed struggle. Pragati Nagar, social, economic and physical eco system is designed to balance capitalism, spiritualism and holistic wellness of people creating a model village near Hyderabad. It is a village with urban amenities and infrastructure; it has cement roads; green platforms; lawns and road dividers all well planned by a seven hundred and twenty five former employees, of a public sector unit privatized by state which later disappeared in to the black hole of private profit from public property. Every person in the town has low cost access towards high quality education from primary to engineering, safe drinking water, sports facilities, secondary health care, prayer halls for all major faiths and modern gymnasium. The village has banned use of alcohol, gutka, and cool drinks and usage of plastics in the village. The tax collection is one hundred percent and financial success of local self governance is exceptional. The genesis of the urban village is unique. The union leaders were fighting the state which was planning to close the organization due to continued losses. Housing Committee of employees identified and constructed an ideal habitant for its members. The visionary leader for the project is Dayakar Reddy, with his team wanted to create a community of self governance with a difference that is with cost effective civic amenities, value based, transparent, consensus decision making and environmentally sensitive. Challenges are plenty for him to address the infrastructure issues. He and his team hired 500 construction experts, masons and builders. Procured material to have economical housing. At the same time the residents were fighting for their livelihood. They with their collective purchase capability bought all their milk and vegetables from the primary source eliminating the middle men. Pragati Nagar is the only panchayat in the country to have obtained ISO 9001:2000 and ISO 14001:2004. For administering common properties People Progress Trust was created with Mr.Sri Satyanarayana, Chairman, Emeritus, HRD Network, as trustee. He is an adjudicator, arbitrator and a Gandhian who does not own a house in the colony mentored from the genesis of village, the local governance model. Dayakar Reddy says this model may be replicated as it requires credibility, transparency and hard work. This case examines the process of attaining this status by using both qualitative and quantitative research tools to find happiness index of people, satisfaction with self governance model, and the evolution of the leadership model based on values of honesty to create a self sufficient village economy in India. The research results indicate that the model is an example of attaining tipping point for local self governance with excellent financial success. It also examines the likely challenges and recommends the need for promoting and replication of the model by way of spread.