OBJECTIVES: Irrational use of antimicrobials has led to grave consequences of antimicrobial resistance and economic burden on the health care system. This study was conducted in find out the pattern and extent of antimicrobial usage in inpatients and outpatients of Medicine and Surgery department and also to determine the economic impact of antimicrobials against their usage. METHODS: The study was conducted over a period of 14 months in both outpatients and inpatients departments of two units of Medicine and Surgery. Prescriptions of inpatients and outpatients were analyzed using International Classification Code of Diseases for diagnosis and Anatomical Therapeutic Chemical Classification (ATC) and Defined Daily Doses (DDDs) for the antimicrobials used. A total of 2128 outpatient prescriptions and 400 inpatients case sheets from Medicine and Surgery were included in the study. RESULTS: In the outpatient department, the average number of medicines prescribed per patient was more in Medicine (3.0) than in Surgery (2.3). The most commonly used antimicrobial in both departments was amoxicillin+clavulanate. The use of antimicrobials in inpatient departments of both Medicine and Surgery was high, as 73.1% of the admitted patients were prescribed antimicrobials. The average antimicrobial prescribed per patient was 2.7. The most commonly used antimicrobials in the Medcine and Surgery inpatients were ceftriaxone, metronidazole and flouroquinolones. A total of 84 samples were sent for microbiological examination of which 39% were positive. Antimicrobial prescription for prophylactic conditions was greater in Surgery than in Medicine. The total DDDs/100 patient days in Medicine and Surgery were 3369 and 2247, respectively. Overall, the expenditure on the antimicrobials was 33% of the total cost of drug treatment. The average cost of antimicrobial per patient was INR 1501. CONCLUSIONS: We propose routine practice of batcerial culture and sensitivity testing, formulation of an antibiotic policy, and antimicrobial stewardship program to improve usage and clnical outcome.