Biogas plant is a digester where anaerobic decomposition of the animal excreta/organic matter takes place and as a result biogas is produced. This gas is rich in methane and can be used for various purposes such as cooking, power generation and lighting. In case of anaerobic decomposition of the organic matter in the open, the gas (methane) produced directly goes into the atmosphere and increases the concentration of green house gases in. Use of biogas obtained through anaerobic decomposition in biogas plants converts methane into carbon dioxide and reduces the load of green house gases. The present paper discusses the potential of green house gas reduction by the use of biogas plants. The paper also discusses about the present status of biogas development in India, economics of biogas plant, selection of proper size of biogas plant along with the Government policy for providing incentive to the user for the construction of biogas plants.