The main focus of this paper is to understand the factors influencing the place of delivery, and why women preferring home deliveries in rural areas though a large number of health institutions such as subcentres, primary health centres and community health centres exists. To highlight these dimensions a study was conducted in three districts of Karnataka state. The respondents for the study were women who had had at least one child during last three years. The study finds that though primary health care services have expanded in recent years, deliveries conducted in health institutions or deliveries assisted by trained personnel are very few. Over half the deliveries are unsafe. Several factors have contributed to this phenomenon. They are: time of delivery, illiteracy, economic conditions of women, customs of natal home, transportation and place of stay of health workers. Moreover, most health centres do not have women medical officers in position, and the lack of staff and inadequate facilities at subcentres and hospitals is an important factor as well. Nearly half the infants died due to maternal causes among women who had deliveries at home. The causes of infant death are: premature delivery, infection in the umbilical cord, being accidentally hit on the head while delivery, breach presentation, severe anaemia of mother, etc. These problems could be easily solved if women are provided with good antenatal services, adequate rest and nutrition during pregnancy and counselled to deliver at health institution. Therefore, one has to promote institutional deliveries to reduce perinatal and neonatal mortality rate. Also there is need to strengthen the dai training programme as a traditional dai would be easily accessible to women in rural areas.