Mental Hospital (or known as Lunatic Asylum) in Baroda was opened on 28th June 1898.

Before establishment of Asylum, dangerous lunatics were confined & treated in the Central Jail, under Magistrate’s Order. Under the provision of the Lunatic Asylum Act, Unnatashraya Nibandh, of Samwat 1955, an Asylum was opened, where a building specially constructed for the purpose near Kareli Baug. It was originally planned for 28 patients, but as greater need arose the accommodation was subsequently enlarged. All criminal lunatics and lunatics under observation were kept in the custody in the mental hospital.

The mental hospital at Baroda was exclusively for the Baroda State subjects and no foreign subjects were allowed except in case of emergency, but still the expenditure was borne by that State from which the inmates came. In similar way any insane belonging to Baroda State was to be treated by the Baroda State only except if the concerned insane was transferred there or sent for the special treatment outside.

Later in 1922, the name Lunatic Asylum changed to Mental Hospital.