Union Budget signals shift in mental health policy, focus on access and crisis care

In the Union Budget 2026–27, mental health received more prominence than in previous years, as Finance Minister Nirmala Sitharaman announced a set of measures aimed at expanding specialised care, strengthening institutions, and addressing longstanding regional gaps in access to help.

The government will establish a second campus of the National Institute of Mental Health and Neuro Sciences (NIMHANS) in North India, noting the absence of a national-level mental health institute in the region. 

Moreover, it will upgrade the existing National Mental Health Institutes in Ranchi and Tezpur as regional apex institutions for mental healthcare, research, and training, in what experts see as a move to decentralise specialised services.

Linking mental health to crisis care and financial vulnerability, the Finance Minister highlighted how medical emergencies often push families—particularly the poor and vulnerable—into sudden distress. 

To address this, the Union Budget proposed increasing emergency and trauma care capacity in district hospitals by 50% through the establishment of dedicated emergency and trauma care centres, which will strengthen physical and psychological care infrastructure at the district level.

These announcements come at a time when countless studies post-pandemic have revealed deep structural gaps in India’s mental healthcare system, particularly outside major urban centres. 

While emergency and trauma care often serve as the first point of contact during psychological crises, access to specialised mental health professionals remains uneven and severely limited across large parts of India.

For instance, a 2024 research paper by the All India Institute of Medical Sciences (AIIMS) on the geographic distribution of mental healthcare in India found that the density of mental healthcare in India varies widely across regions, with some areas far below national and WHO norms. 

In Madhya Pradesh, for example, researchers reported a psychiatrist-per-population ratio of just 0.21 per 1,00,000 people—far below the national average and the WHO recommendation of 3 per 1,00,000. 

The same study showed that 24 of the 54 districts in MP had no practising psychiatrists, as most of them were clustered around larger cities, leaving large rural and peripheral districts without specialist care.

These access gaps have wider implications during crises, when delays in care can rapidly escalate both medical and psychological harm. In the absence of specialised services at the district level, emergency departments often become the default point of care for people experiencing acute trauma, accidents, or mental health crises. 

This year’s budget has positioned strengthening emergency and trauma care infrastructure as a critical intervention. The goal is to help stabilise patients early, reduce preventable complications, and limit the cascading emotional and financial distress faced by families when timely care is unavailable.

A 2023 peer-reviewed assessment of trauma care systems in the Kolar district of Karnataka found that trauma care services in public and private hospitals were operating well below the WHO standards. 

Specifically, trauma care systems in Level 2 and Level 3 hospitals were functioning at only 56% and 59%, respectively, of the WHO’s Essential Trauma Care guidelines, owing to significant shortcomings in infrastructure, human resources and emergency protocols. 

Tertiary hospitals performed better at about 83%, but even this was below ideal levels,  highlighting gaps that can delay critical treatment and worsen both physical and psychological conditions of emergency patients. 

Similarly, the Emergency and Injury Care at District Hospitals in India report 2021, commissioned by NITI Aayog and the Department of Emergency Medicine, AIIMS, New Delhi, highlighted widespread deficiencies in emergency care across India’s district and secondary-level hospitals. 

Using visit data from 34 district hospitals across 28 states and two union territories, the study documented gaps in ambulance services, health infrastructure, human resources and essential equipment, which compromise the system’s ability to deliver timely emergency care.

The Budget 2026–27 announcements signal a shift towards recognising mental health as a structural challenge rather than a peripheral problem. By pairing the expansion of specialised institutions with investments in district-level emergency and trauma care, this could be an attempt to close access gaps, workforce shortages, and weak crisis-response systems. 

Whether these measures translate into sustained improvements will depend on implementation, staffing, and long-term funding. However, the emphasis on decentralised infrastructure and first-response capacity marks a departure from earlier approaches, reflecting a growing acknowledgement that mental healthcare in India must be built closer to on-ground realities of distress.