Despite being low in comparison to most countries, public expenditure on health in India is substantial in size. Analysing public expenditure patterns is essential to understand their directions and gauge the efficiency of the expenditure. This study examined health expenditure for Maharashtra and the priorities in allocation, focusing on the Maternal and Child Health component (MCH)—the fund-flow mechanisms in the state, and the challenges of planning, execution and reporting. Issues related to the capacities of the decentralised levels and the implications for the absorption of funds at different levels were also examined. The study also explored how Gram Panchayats utilise the Gram Panchayats Development Plan to prioritise health in the state.