Computational Morphology and Natural Language Parsing are the two important as well as essential tasks required for a number of natural language processing application including machine translation. Developing well fledged morphological analyzer and generator (MAG) tools or natural language parsers for highly agglutinative languages is a challenging task. The function of morphological analyzer is to return all the morphemes and their grammatical categories associated with a particular word form. For a given root word and grammatical information, morphological generator will generate the particular word form of that word. On the other hand Parsing is used to understand the syntax and semantics of a natural language sentences confined to the grammar. This literature survey is a ground work to understand the different morphology and parser developments in Indian language. In addition, the paper also deals with various approaches that are used to develop morphological analyzer and generator and natural language parsers tools.