Unsafe water, poor sanitation and unhygienic conditions claim around 0.5 million children before the age of 5 from diarrhoea in India annually. This paper aims to provide critical insights into ruralurban differential in basic sanitation and safe drinking water, which calls for an intensive mobilization of resources to reduce the vast coverage gap between urban and rural populations in India. The objectives of this paper is to assess the level, trend, progress rate and State-wise rural-urban differential in accessibility and availability of safe drinking water facility and availability of basic sanitation facility within premises across the country. It also examines the association between diarrhoea among children under five and water, sanitation and various socio-economic and demographic characteristics of Indian households. Data on sources of drinking water and latrine facility from houses, household amenities and assets- Census of India, 1981-2011 and third round of the National Family Health Survey (NFHS-3, 2005–06). Binary Logistic Regression technique was used to explain association between diarrhoea among children under five and water, sanitation and various socio-economic and demographic characteristics of Indian households. India is “on track” to meet the target on access to safe drinking water with sharp reduction in urban-rural disparities. But as per sanitation facility is concern India is lagging far behind. This paper has also found that households with unimproved latrine facility within premises have a higher prevalence of having diarrhea among children U-5 than do those with improved latrine facility.