Budget 2026: Major Boost To Mental Health, Ayush Upgrades, And Healthcare Workforce

The Union Finance Minister, Nirmala Sitharaman, made a slew of announcements in the Budget 2026, particularly in the healthcare space. Presenting the budget for the ninth time, the minister focused on mental health and traditional Indian treatments under Ayush.

Focus On The Mental Health And Trauma Centre

The Minister said, “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.”

Further, she proposed to increase the capacity at the district level too. “Emergencies expose families, particularly the poor and vulnerable, to unexpected expenditure. We will strengthen and increase these capacities by 50 per cent in District Hospitals by establishing Emergency and Trauma Care Centres”, she announced.

Establishing New All India Institutes Of Ayurveda And Upgrading AYUSH Pharmacies

To give a boost to the traditional Ayurvedic treatments, and establish a global presence, the minister proposed to set up three new All India Institutes of Ayurveda, upgrade AYUSH pharmacies and Drug Testing Labs for a higher standard of certification ecosystem. In addition to it, the budget proposed to train more people, spread awareness about traditional medicine, and increase skilled personnel in the domain, along with upgrading the WHO Global Traditional Medicine Centre in Jamnagar to put more emphasis on research.  

Abdul Majeed, chairman and managing trustee of Hamdard Laboratories, says, "The Union Budget’s emphasis on strengthening the AYUSH ecosystem marks a significant step towards reinforcing India’s traditional systems of medicine. Measures such as upgrading AYUSH pharmacies and drug testing laboratories, expanding the pool of skilled professionals, and bolstering evidence-based research are expected to improve quality standards and public trust in traditional healthcare. The proposal to establish three new All India Institutes of Ayurveda further underlines the government’s focus on institutional capacity-building and formal education in traditional medicine. Together, these initiatives aim to bridge traditional medical knowledge with contemporary healthcare needs, while supporting preventive and holistic approaches that continue to gain relevance in modern health discourse.”

Establishing New Institutions For AHPs In 10 Disciplines, Train 1.5 Lakh Multiskilled Caregivers

One more important proposal is to establish new institutions for Allied Health Professionals (AHPs) in ten selected disciplines including radiology, anesthesia, optometry, OT technology, applied psychology, behavioural health, upgrade the existing ones, and developing a range of National Skill Qualification Framework (NSQF)-aligned programmes to train 1.5 lakh multiskilled caregivers. The aim to set up new institutions is to add one lakh AHPs over the next five years.

Dr. Ankit Gupta, Managing Director, Park Medi World Limited, says, "At a time when the country’s disease burden is shifting towards non-communicable diseases such as diabetes, cancer, and autoimmune disorders, alongside a rapidly ageing population. The proposed addition of one lakh allied health professionals will help bridge workforce gaps across hospitals, rehabilitation centres, and community-based care settings. This is complemented by plans to train 1.5 lakh caregivers through NSQF-aligned, multi-skilled programmes, strengthening long-term, elderly, and post-acute care services.”

Medical Value Tourism

To enhance medical value tourism in the country, the government proposed to establish five hubs in different states in partnership with the private sector.

“The establishment of five regional medical tourism hubs in partnership with the private sector reinforces India’s ambition to emerge as a preferred global healthcare destination. These initiatives create meaningful opportunities to scale specialised allied services, strengthen geriatric and rehabilitation care, and contribute to medical value tourism aligned with national healthcare priorities,” says Gupta.

Scope For Health Insurance Sector

G Srinivasan, MD and CEO, Galaxy Health Insurance, shares, “The government’s initiatives to expand AYUSH, mental health, and emergency care infrastructure present a significant opportunity for the health insurance sector. With new institutes, upgraded labs, and strengthened research, insurers can confidently broaden coverage to include preventive and wellness therapies, AYUSH treatments, mental health support, and trauma care. Improved access to skilled care and more distributed facilities will enhance treatment outcomes, reduce claim severity, and enable more predictable pricing, paving the way for innovative, holistic health plans that address the evolving needs of individuals and families.”

The budget statement shows a total of Rs 1,04,599 crore expenditure on healthcare.