This paper focuses on the issues of Resistor-Capacitor-based Electrical Discharge Micro-Machining process and investigates the effects of tool speed and polarity on the performance measures such as Tool Wear Rate, Material Removal Rate, Overcut and Taper Angle by drilling on 316L Stainless Steel. Taguchi's L54 mixed orthogonal array design is employed to conduct experiments by varying tool polarity at two levels and voltage, capacitance, spindle speed at three levels. The cause and effect relationship between the experimental factors and responses are analysed and discussed using Factorial Analysis of Variance technique. Optimum combinations of machining parameters are also evaluated using Taguchi-based Grey Relational Analysis, by considering grey relational grade matrix and influence of process parameters on the responses. Further, microscopic analysis is done to identify the micro-voids, globular formation, and cracks present on the surface of the hole produced under various machining conditions.