Finance Minister Nirmala announced plans to establish a second NIMHANS campus and modernise the National Mental Health Institutes located in northern India. Mental health and trauma care emerged as a key priority in Union Budget 2026 with Finance Minister Nirmala Sitharaman announcing major institutional expansions aimed at strengthening India’s mental healthcare infrastructure. The proposals mark one of the most significant budgetary interventions in the mental health sector in recent years, signalling a shift toward long-term capacity building and regional access to specialised care.

As part of the Budget, the government outlined plans to establish a second National Institute of Mental Health and Neurosciences (NIMHANS) and upgrade existing national mental health institutions, with a focus on improving trauma care, research, and training across the country.

NIMHANS 2 To Strengthen Trauma & Mental Healthcare

A major highlight of the announcement was the proposal to set up NIMHANS 2, envisioned as a national-level institution dedicated to advanced mental health and trauma care. Modeled on Bengaluru-based NIMHANS, the new institute is expected to expand India’s capacity to deal with rising mental health challenges, including stress-related disorders, depression, addiction, and trauma linked to accidents and disasters.

The move comes amid growing recognition of mental health as a public health priority, especially after the COVID-19 pandemic, which exposed gaps in access to psychiatric care and counselling services. NIMHANS 2 is expected to play a critical role in research, policy support, and the training of mental health professionals, addressing shortages in psychiatrists, psychologists, and psychiatric social workers.

Ranchi Institute To Be Developed As Regional Hub

In addition to the new national institute, Budget 2026 also proposed the development of the National Institute of Mental Health and Neurosciences in Ranchi as a regional centre of excellence. The Ranchi-based institute will be strengthened to serve as a key hub for eastern India, improving access to specialised mental healthcare in regions that have traditionally faced resource constraints.

Upgrading the Ranchi institute is expected to enhance clinical services, expand academic programmes, and boost research capabilities. By positioning it as a regional institution for development, the government aims to decentralise advanced mental health services and reduce the burden on a few urban centres.