A background note can be accessed here: OECD Report on Mental Health and Economic Productivity
The OECD analysis positions mental ill health as a macroeconomic drag driven largely by presenteeism and reduced productivity rather than direct healthcare costs. How does this reframing translate to the Indian context, particularly given the dominance of informal employment and limited workplace-based mental health frameworks?
In economies with higher levels of formal employment, productivity losses linked to mental illness are easier to quantify through absenteeism, presenteeism, and workforce attrition. In India, where a large share of employment remains informal, the economic effects are far less visible despite being deeply consequential.
Through our work at The Live Love Laugh Foundation, in rural and tribal communities, mental health challenges often manifest through reduced daily earnings, irregular work participation, and withdrawal from livelihood activities altogether. These disruptions directly affect household resilience and economic stability, yet they rarely enter formal productivity or labour datasets.
Our early engagement with general physicians countrywide also suggests that many people presenting with physical symptoms may have underlying mental health conditions. Further, nearly 40 percent of individuals with chronic illnesses are likely to experience depression or anxiety. This creates a dual burden: higher healthcare utilisation alongside diminished functional capacity and earning potential.
In the formal economy, the costs are more measurable, with evidence suggesting that stronger employee mental health support could unlock economic gains of up to 8 percent of GDP. These realities underline the need to integrate mental health into primary healthcare, strengthen community-based early identification and referral systems, and create incentives for employer-supported interventions across both organised and informal sectors.
The report makes a strong economic case for early prevention, particularly among youth. To what extent are India’s fiscal and institutional arrangements aligned to prioritise preventive mental health interventions?
There are encouraging signs that prevention is receiving greater policy attention within India’s public health and development framework, particularly in relation to young people. Recent developments, including the Supreme Court’s June 2025 guidelines on student mental health and the growing emphasis on mental health in the Economic Survey and Union Budget 2026, suggest a more evidence-informed recognition of its long-term social and economic implications.
The growing policy focus on digital addiction is especially significant. Concerns around gaming-related overuse, online gambling, excessive screen exposure, and technology overuse are increasingly being linked to sleep disruption, stress, reduced concentration, and broader psychosocial distress among youth.
Institutionally, initiatives such as Tele-MANAS (Tele Mental Health Assistance and Networking Across States) have expanded access to mental health support nationally, while specialised interventions like the SHUT Clinic (Service for Healthy Use of Technology Clinic) at NIMHANS (National Institute of Mental Health and Neuro Sciences) demonstrate how emerging behavioural risks can be addressed through targeted service models. Preventive approaches, however, remain unevenly integrated into school systems, primary healthcare, and community-level delivery structures.
A major challenge remains the absence of comprehensive national data, particularly on behavioural and technology-related risks. This limits the ability to design targeted preventive programmes, allocate resources effectively, and sustain fiscal prioritisation for early intervention.
Mental ill health is linked to broader socio-economic stressors, including inequality and post-pandemic effects. How feasible is a whole-of-government approach in India’s context, given existing institutional silos and state-centre dynamics?
India has begun moving toward a broader, cross-sector understanding of mental health, but translating that into a fully coordinated whole-of-government approach remains a gradual process.
Some recent developments indicate growing institutional convergence. The Online Gaming (Regulation) Act 2025, for instance, reflects engagement beyond the health sector, extending into areas such as digital governance and financial regulation. Similarly, mental health concerns increasingly feature across education, youth welfare, labour, and technology policy domains rather than being treated solely as clinical issues.
At the same time, implementation remains uneven across states, and coordination between sectors is still inconsistent. Preventive mental health efforts are not yet systematically integrated into frontline systems such as primary healthcare, schools, workplaces, and community outreach networks. Variations in administrative capacity and fiscal prioritisation across states also affect how national initiatives are operationalised locally.
A whole-of-government model in India will therefore depend less on creating entirely new institutions and more on improving convergence between existing systems. Stronger inter-ministerial coordination, shared data frameworks, locally adaptable implementation models, and sustained investment in community-based support mechanisms will be essential. Without these linkages, responses risk remaining fragmented despite growing recognition of the scale of the challenge.