National Rural Health Mission is an ambitious programme of the central government, to provide comprehensive and integrated primary healthcare to the rural poor, women and children, launched throughout the country, in April 2005. The mission attempts to bring changes in the health system by giving leadership to Panchayati Raj Institutions. This monograph examines the functioning of the core components of the mission like JSY, Untied funds, Maintenance grants and VHSC at two PHCs in Karnataka. As an outcome of JSY initiative, institutional deliveries were on the rise. Untied funds given to Sub Centre and PHC though a good initiative, there was confusion about the usage of untied funds at all levels. Maintenance grants are helping the organizations to provide better facilities to patients. Elected members generally were not aware of VHSC and their role under NRHM. Lack of coordination between elected local bodies and the health staff is the main lacunae in the scheme