Introduction Common Mental Disorders (CMD) cause significant impairment in socio-occupational functioning, leading to dreadful socio-economic consequences on the individual, family, and society. Even though mental illness is prevalent worldwide, the public health burden of mental illness seems to be the highest in low- and middle-income countries (LMICs). In these countries, lack of access to essential mental health services has also led to a significant treatment gap in psychiatric disorders. In such a situation, reaching out to the community and utilizing community-based resources to decentralize mental health care is essential.Objective The aim of this narrative review was to appraise the impact of community-based mental health interventions on CMD. This review also highlights the impact of the rights-based approach in mental health care and the psychosocial determinants of mental health.Methods A thorough search of databases, such as PubMed/Medline, CINHAL, and Scopus, was done to gather articles published between January 2001 and July 2023. Studies answering the central theme of the review, such as the trends and existing mental health services in the community and their impact on CMD, were included in the review. The relevant articles were analyzed in detail.Results Involvement of people at the grassroots level through peer support programs or in recovery camps, addressing the social determinants like poverty, housing, and unemployment, and a rights-based approach in every mental health service were found to be beneficial and effective in running community mental health services. These approaches are the need of the hour and are well accepted by the people in the community.Conclusion In order to overcome the treatment gap in LMICs, a well-utilized community mental health service is the only way out. The allocation of adequate funds by policymakers, the development of infrastructure, and investment in manpower need to be scaled up tremendously.