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Budget 2026-27 announces a second national mental health institute to address regional gaps in psychiatric care
Emergency and trauma care capacity in district hospitals to be expanded by 50%
Existing mental health institutes in Ranchi and Tezpur to be upgraded as regional apex centres
Measures target poor and vulnerable families exposed to health shocks and emergencies
India will set up a second national mental health institute and expand trauma care services in district hospitals, finance minister Nirmala Sitharaman announced on February 1, 2026, as the Union Budget for 2026-27 seeks to address long-standing gaps in access to psychiatric and trauma care.
The government would strengthen mental health infrastructure as part of a wider effort to support vulnerable populations facing economic stress, emergencies and social shocks, Sitharaman said.
A central proposal is the establishment of NIMHANS-2, a second National Institute of Mental Health and Neuro Sciences. The National Institute of Mental Health and Neuro-Sciences (NIMHANS) is a medical institution in Bengaluru, which serves as the apex centre for mental health education and neuroscience research at present.
“There are no national institutes for mental healthcare in north India,” the finance minister said. This forces patients to travel long distances for specialised treatment, training and research-linked care.
Alongside the new institute, the Budget also proposes upgrading existing national mental health institutes in Ranchi and Tezpur.
The Budget also links mental health to emergency and trauma care, recognising the financial and psychological shock that accidents, disasters and violence can inflict on families.
Sitharaman said the government would increase emergency and trauma care capacity by 50 per cent in district hospitals, through the establishment of Emergency and Trauma Care Centres.
“Emergencies expose families, particularly the poor and vulnerable, to unexpected expenditure,” she told Parliament.
Mental health was presented as one element of a wider strategy to support groups facing structural disadvantage. The Budget also highlighted efforts to empower persons with disabilities through access to livelihoods, training and assistive devices, and to improve incomes and resilience among small and marginal farmers.
The Economic Survey 2025-26,, presented January 29, 2026, identified mental health as a major concern, posing a direct challenge to India’s public health system. It highlighted a high prevalence of social media addiction among those aged 15-24. Drawing on multiple studies, the survey pointed to a rise in anxiety, depression, low self-esteem and stress linked to cyberbullying.
The survey further emphasised growing digital addiction among children and adolescents, noting that increased screen time is affecting academic performance, productivity and sleep, while also weakening social connections.