NEW DELHI: The Union Budget 2026–27 placed a clear emphasis on mental health, with Union Finance Minister Nirmala Sitharaman announcing the establishment of a second National Institute of Mental Health and Neuro Sciences (NIMHANS) in north India.
Presenting the Budget in Parliament on Sunday, Sitharaman said, “Reaffirming our commitment to mental health and trauma care. There are no national institutes for mental healthcare in north India. We will therefore set up a NIMHANS-2 and also upgrade National Mental Health Institutes in Ranchi and Tezpur as regional apex institutions.”
She added that emergencies often expose families, particularly the poor and vulnerable, to unexpected expenditure, and said the Centre proposes to “strengthen and increase these capacities by 50% in district hospitals by establishing emergency and trauma care centres”.
The announcement received immediate support from mental health professionals.
Welcoming the move, Dr Om Prakash, Professor of Psychiatry at the Institute of Human Behaviour and Allied Sciences (IHBAS), Delhi, said, “It will help give much impetus to mental health treatment in the country.”
According to Dr Samir Parikh, Chairperson, Mental Health Programme, Fortis Healthcare and Adayu Mindfulness, “Mental health has too long remained at the margins of public discourse, despite its profound influence on productivity, families, and the social fabric of our nation. The recognition accorded in Budget 2026, particularly the proposal to establish NIMHANS 2.0 to widen access to specialised care, signals a thoughtful and necessary recalibration of national priorities.”
He said investment in mental health infrastructure is not merely a healthcare intervention but a commitment to dignity, inclusion and long-term societal resilience.
Neha Kirpal, Founding Cohort Member of the India Mental Health Alliance (IMHA), said the Budget’s focus on building capacity for mental healthcare across the country was a long-awaited step.
“Significant announcements include the upgrade of existing institutions for allied mental health professionals, including applied psychology and behavioural health, and the announcement of new mental health institutes in Tezpur and Ranchi, along with a second NIMHANS in north India, all signalling a clear intent to strengthen public infrastructure and timely trauma support,” she said.
Dr Jothi Neeraja, Founder and Managing Director of People Tree Hospitals and Maarga Mind Care, said, “The Union Budget 2026 takes a constructive step in recognising that healthcare capacity is not just about beds and buildings, but about depth of care, and it is encouraging to see mental health receive structural attention through the proposed NIMHANS 2.0.”
Dr Simon Grant, Physician and Trustee of Ruby Hall Clinic, said mental health services in western India require urgent attention, and that the expansion under NIMHANS 2.0 could help address this gap.
The Economic Survey 2026 had earlier flagged mental health as a significant public health challenge in India. It pointed to a high prevalence of social media addiction among people aged 15 to 24 years, citing studies that showed rising anxiety, depression, low self-esteem and stress linked to cyberbullying.
The survey also highlighted increasing digital addiction among children and adolescents, noting that excessive screen time is affecting academic performance, productivity and sleep, while weakening real-life social connections.
The Budget also focused on creating a skilled healthcare workforce. Sitharaman announced that existing institutions for Allied Health Professionals (AHPs) would be upgraded and new AHP institutions would be established in both the private and government sectors.
“This will cover 10 selected disciplines, including optometry, radiology, anaesthesia, OT technology, applied psychology and behavioural health, and add 100,000 AHPs over the next five years,” she said.
A major push was also announced for geriatric care.
“A strong care ecosystem, covering geriatric and allied care services, will be built. A variety of NSQF-aligned programmes will be developed to train multiskilled caregivers, combining core care and allied skills such as wellness, yoga and the operation of medical and assistive devices. In the coming year, 1.5 lakh caregivers will be trained,” Sitharaman said.
According to Rajit Mehta, Chairperson, Association for Senior Living India, and MD and CEO of Antara Senior Care, “The Union Budget 2026–27 recognises India’s ageing population through several significant announcements. The declaration to create a 1.5-lakh-strong geriatric caregiver workforce, with training aligned to NSQF programmes, is a meaningful step towards addressing workforce gaps in the care economy.”
To promote India as a hub for medical tourism services, the finance minister also proposed launching a scheme to support states in establishing five regional medical hubs in partnership with the private sector.
“These hubs will serve as integrated healthcare complexes that combine medical, educational and research facilities. They will have AYUSH centres, medical value tourism facilitation centres and infrastructure for diagnostics, post-care and rehabilitation,” she said.
The hubs are expected to provide diverse job opportunities for health professionals, including doctors and allied health professionals.
On AYUSH, Sitharaman said ancient Indian yoga gained mass global recognition after Prime Minister Narendra Modi took it to the United Nations.
“Post-COVID, Ayurveda gained similar global acceptance and recognition. Exporting quality Ayurvedic products helps farmers who grow the herbs and the youth who process the products. To meet growing global demand, a few more steps are being taken,” she said.
She announced the setting up of three new All India Institutes of Ayurveda; upgrading AYUSH pharmacies and drug testing laboratories to higher standards of certification; making more skilled personnel available; and upgrading the WHO Global Traditional Medicine Centre in Jamnagar, Gujarat, to strengthen evidence-based research, training and awareness for traditional medicine.
Dr Mukesh Batra, Founder-Chairman Emeritus of Dr Batra’s Healthcare, said, “The Union Budget 2026–27 signals a clear policy shift towards strengthening preventive and integrated healthcare, particularly beyond metropolitan centres.”
“The finance minister’s proposal to set up five regional medical hubs, with dedicated AYUSH centres that combine diagnostics, rehabilitation and post-care services with traditional systems of medicine, addresses a long-standing gap in continuity of care for chronic and lifestyle diseases,” he added.