Making the announcement Thursday, Chidambaram said the focus of the government was "health for all".
He said the new National Health Mission that combines the rural mission and the proposed urban mission would get Rs.21,239 crore (Rs.212 million), a hike of 24.3 percent over the revised estimates.
While the rural mission aims to provide better health facilities to people living in remote places, the proposed urban mission plans to provide health amenities to those in shanties in cities and towns.
Last year's budget was Rs.25,927 crore (Rs.259 million).
"I propose to provide Rs.4,727 crore (Rs.42 billion) for medical education, training and research," Chidambaram said.
He said the national programme for the healthcare of the elderly was being implemented in 100 select districts of 21 states.
"Eight regional geriatric centers are being funded for the development of dedicated geriatric departments. I propose to provide Rs.150 crore (1.5 billion) for this programme," he added.
The minister said the government would mainstream the department of AYUSH - Ayurveda, Yoga, Unani, Sidddha and Homoeopathy - through the national health mission.
"I propose to allocate Rs.1,069 crore (10 billion) to the department of AYUSH," he added. The department is under the health ministry.
The minister said six All India Institute of Medical Sciences-like institutions had admitted their first batch of students in the academic session that commenced September 2012.
The hospitals attached to the colleges will be functional in 2013-14.
"I propose to provide Rs.1,650 crore (Rs.16 billion) for these institutions," Chidambaram said.