Innovations under National Rural Health Mission have paved the way for increased utilization of hospitals for childbirth. The association of increase in hospital deliveries with decline in the perinatal mortality rate in rural India after the launch of NRHM in 2005 was assessed using the Sample Registration System reports. Relative increase in hospital deliveries was 57% ;from year 2005 to 2008 but relative decline in the PNMR was only 2.5% ;in the rural areas of Indian states (r=0.2; 95% ;confidence interval -0.2-0.6; P=0.3). Hence, quality of care at the time of childbirth needs to be assessed.