In the present scenario, Information technology has added the impetus to the services provided by the government. This paper highlights the role and potential of information and communication technologies (ICTs) in supporting the - good governance‖ programs in developing countries. ICTs an make a significant contribution to the achievement of good governance goals. This 'e-governance' makes the governance more efficient and more effective, and also brings benefits to the citizens of the country. We will be outlining the three main contributions of e-governance: firstly improving government processes; secondly connecting citizens and thirdly building external interactions. The developing countries face two major challenges. First, the strategic challenge of e-readiness: preparing six identified pre-conditions for e-governance. Second, the tactical challenge of closing design-reality gaps: adopting best practice in e-governance projects in order to avoid failure and to achieve success. This paper discusses the factors which are responsible for good governance, e-government initiatives in different states of India, and also includes some current challenges for managing E-Government projects in India. This paper also includes the current status of E-Governance in India (Eleventh Five Year Plan Achievements) and future prospects of E-Governance in India i.e. the vision and objectives of the Twelfth Five Year Plan (2012-17), its major recommendations and its targets.