All democracies have loopholes; never really traveled anywhere, yet...these are my views on India. The most common reasons may be;
Poor education- In a society where people have a low level of education, it is easy to be manipulated by politicians. They can use their own words to promote the benefits of not having a good system in place and make people think that it's not worth changing things around because democracy is perfect. That's how they get away with not investing in the public system and the quality of life for everyone starts to drop off.
Corruption- Will come from all parts of society including government officials, politicians, and even wealthy individuals. It doesn't take much for someone who's corrupt to get their way with things because they don't care about what anyone else thinks.
Wealth distribution- Certain "smart families", were taught the importance of assets and compound interest.
In India, people are taught to "love" their elders, implicit obedience to whatever they say. Even when they don't have a clue about a subject! Financial education is non-existant because everyone is taught that, they have to work hard.
Competition between the two major parties in a democracy. In order to get more votes from voters, each party would try to find every possible loophole in the system to benefit themselves and their supporters.
There are many individual groups with different needs and interests. In order to satisfy these different needs, the government would have to provide them with specific privileges so they can be satisfied, which will result in loopholes being created as well.
The root of the problem is the flawed ideology behind democracy.
Democracy was based on the idea that if people are educated about politics, they will make intelligent decisions. The flaw is that there are too many variables to account for, and these can change drastically depending on who or what influenced them. For example, the media may have a large impact on shaping someone’s opinions.
Democracy is great in theory, but it needs to be applied with caution in order to not be exploited by those who do not have the best intentions for it.
We need knowledgeable, smart leaders.