I wasn't checking the ./configure output properly. The problem was, I was trying to install gtk and pygtk without installing cairo and pango. So pygtk skipped building gtk packages because it did not find any cairo package. This was mentioned in the ./ configure script but I had not checked that.
Summarizing:
To configure pygtk to python need to folow these steps
install sqlite-devel #If sqlite needed
install python(2.7)
install gtk(2.24.0) -> requires glib(2.27.3), atk(1.29.2), cairo(1.8.10), pango(1.22.4), gdk-pixbuf(2.21.3)
install pygtk(2.24.0) -> requires pygobject-2.28.3, pycairo(1.8.10)
All the above packages must be compiled to the same prefix, and need to set the PYTHON and PATHONPATH environment variables. The versions of packages also play major role. Added version in parenthesis that worked for me.
There are many dependencies while installing some of the packages so I had to install following packages using yum: libxext, librender, gettext, zlib, libgtk2-devel