President Pranab Mukherjee and Vice President Hamid Ansari led the celebrations at Subhash Maidan in north Delhi here in the presence of Modi, Singh and Gandhi.
Addressing the gathering in Hindi, President Mukherjee said the day symbolises victory of good over evil.
"It inspires us to face difficulties... Come, let us work together for development," he said in his brief address.
Before 'Ravan Dahan' when Ravan, Meghnad and Kumbhkaran are burnt in effigies, the dignitaries released white pigeons-- considered symbol of peace.
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They were also presented with traditional weapons such as bow and arrow, sword, trident and mace by the organisers.
They also enjoyed the final act of Ram Lila where Ravan is killed in battle with Lord Ram.
While Modi was dressed in saffron kurta and green Jawahar jacket, Singh was wearing his trademark white kurta-payjama. People chanted Modi, Modi when he waved at the crowd. People were seen taking pictures on their mobile phones.
Singh and Gandhi had reached the venue before the PM. Later, Modi, Singh and Gandhi received the Vice President and the President at the gates of the grounds.
After the celebrations at Subhash Maidan, Sonia and Singh reached Ramlila Maidan for another 'Ravan Dahan' event where they were joined by Congress Vice President Rahul Gandhi.
Congress leader J P Agarwal is one of the organisers of the celebrations at Ramlila Maidan.