This study has been designed to asses the efficacy of inhaled budesonide in reducing oxygen requirement in neonates with respiratory distress. Neonates with respiratory distress receiving inhaled budesonide will be compared with those receiving placebo and duration of oxygen requirement in two groups will be compared. Respiratory distress is one of most common reasons a neonate is admitted to the neonatal intensive care unit. Indian National Neonatal-Perinatal Database reported significant morbidity associated with neonates developing respiratory distress. Irrespective of the cause, lack of proper management of neonates with respiratory distress can result in respiratory failure and cardio pulmonary arrest. Oxygen therapy is an important part in management of neonates with respiratory distress but despite beneficial effect of oxygen therapy , long term oxygen therapy has shown to cause toxicity with evidence suggesting development of Bronchopulmonary dysplasia (BPD) and retinopathy of prematurity (ROP) in neonates on long term oxygen therapy. Budesonide is potent topical anti-inflammatory agent with powerful effects on respiratory system. It promotes production of anti-oxidant enzymes and can reduce bronchial and pulmonary edema. It also has anti inflammatory action by reducing production of anti inflammatory cytokines. .Severity of lung injury as indicated by oxygen dependency also reduced after administration of steroid. There is paucity of data on use of budesonide as first line agent in neonates with respiratory distress. Few studies have described the role of budesonide in neonates with Respiratory Distress Syndrome (RDS), Meconium Aspiration Syndrome (MAS), Transient Tachypnea of Newborn (TTN) and Bronchopulmonary Dysplasia (BPD) in reducing oxygen dependency and clinical improvement and the results have been mostly promising. Therefore, through this study, we propose to evaluate efficacy of inhaled budesonide in reducing oxygen dependency in neonates with Respiratory distress.