The 73rd and 74th Amendments to the Constitution has raised hoped for improving many services in rural areas by handling them over to Panchayat. Gujarat was one of the first states to implement the Panchayati Raj system in 1963 and here primary healthcare was handed over to District Panchayats. This paper reviews the experience of PHC under panchayat system. The paper is based on interviews with officials and a few panchayat leaders and experience of the authors with the health system. Authors discuss several issues and narrate experiences to show that there are several problems related to implementation of PHC system under district panchayat. But at the same time there are also some positive aspects of panchayat control over of PHCs. Overall the paper reaches the conclusion that it is not very clear whether the benefits of handing over PHC sytem to panchayats out weights the risks. There are several problems and shortcoming in the PHC system of Gujarat which the district panchayat have not been able to address effectively. In the end the paper discusses implications of panchayati raj for reproductive and child health programme.