Hundreds of people across India die each year from the virus, which is transmitted by mosquitoes from pigs to humans, with malnourished children particularly vulnerable.
"I am extremely distressed at the runaway conquest of encephalitis and it is high time extraordinary steps were taken to stymie it," health minister Harsh Vardhan said in a statement.
Vardhan added that he ordered his ministry to go on "overdrive ... and have a total immunisation campaign for encephalitis in the affected districts" over June 22-23.
He said that the virus, which normally affects children aged below 15, killed 44 children in Bihar state in the past two weeks and claimed 500-600 people each year in Uttar Pradesh alone.
Harsh Vardhan, a doctor praised for his work on eradicating polio in India, was sworn in as health minister in Prime Minister Narendra Modi's cabinet last month after his right-wing Bharatiya Janata Party won the clearest mandate for 30 years.
Vardhan aims to make his encephalitis campaign as successful as his polio one, which led to India's 1.2 billion population becoming a certified polio-free nation in March after health volunteers repeatedly vaccinated children countrywide.
The ministry will aim to have dedicated beds for encephalitis patients in all hospitals in affected districts and has already provided 100 ventilator machines in the hardest-hit Gorakhpur district in Uttar Pradesh state.
While Japanese encephalitis is responsible for about 10 percent of deaths, the more fatal Acute Encephalitis Syndrome is harder to tackle as its causes remain mostly unknown, the statement said.
Symptoms include headaches, seizures and fever and health experts say 70 million children nationwide are at risk.
The virus is present in 19 Indian states, including the most populous ones of Uttar Pradesh and Bihar.