Transportation is the backbone for any economy. As the number of vehicles is increasing day by day, traffic jams or congestions are very common. Jams are not only frustrating, but also increases air pollution. It has adverse effect not just for our climate, but everybody's health too. Most ITS techniques are not capable to solve the problem of traffic congestions in developing regions due to high cost and assumptions of orderly traffic. This paper focuses on the techniques used for detecting the traffic jam and for avoiding congestion on roads. The survey is done to study the challenges faced by current vehicle detection techniques and the solution provided for reducing and avoiding congestion. In the end we conclude that a GPS based system can be a better alternative technique for traffic jam detection as it can monitor the whole road network and require low installation cost and can be incorporated with the strategies for congestion avoidance which will help to improve the traffic flow.