To evaluate the perinatal outcome of premature babies according to the mode of delivery. A total of 113 pregnant women and 124 neonates who delivered from 30 to 35 weeks of gestation were enrolled and outcomes of 70 neonates born vaginally were compared to 54 neonates born by caesarean. Neonatal mortality rate was 20 percent for infants in caesarean group as compared to 10 percent for vaginal group. There was no significant difference in the neonatal morbidity among both the groups. Caesarean delivery cannot be routinely recommended, unless there are obstetric indications.