Based on an analysis of budget documents, financial management reports of the state health societies (SHS) and progress reports published by the National Rural Health Mission (NRHM) and various studies and evaluations related to the implementation of NRHM, this study presented different perspectives of health expenditure in the states of Bihar, Rajasthan and Tamil Nadu. The study highlighted that public investments are critical and are the first step to improving the healthcare system, especially in rural areas or where the concentration of poor population is higher. Investments on infrastructure (physical and human), healthcare facilities and behavioral change communication are critical for the improvement in utilisation of healthcare facilities, especially by rural poor and marginalised sections.