This paper examines the role of observed contextual factors like topography, development and literacy on severe malnutrition among social groups in rural Maharashtra based on the Reproductive and Child Health District Level Household Survey (RCH-DLHS) Round II (2002–04) data. Multilevel modelling techniques were applied in order to examine the district-wise variations in severe malnutrition associated with the characteristics of the places (contextual effects), as the relationships with the type of people (compositional effects) have already been well established. The results show that developmental aspects such as road connectivity, community literacy, toilet facilities and household standard of living contribute positively to the status of severe malnutrition. Also, the scheduled tribe, aboriginal underprivileged group are more at risk of severe malnourishment due to a lack of proper development, poor awareness about maintaining and enhancing the nutritional value of food and lack of hygiene and sanitation as compared with the scheduled castes, another aboriginal group.