Background: Bipolar disorder despite being episodic illness, due to chronicity imposes a great financial burden of care on service users (patients & caregivers), especially in traditional societies like India where caring for a family member with disability is a norm. Economic burden serves as a barrier in access to health, infringing upon the right to health. Different determinants add to this burden in urban and rural settings, requiring different intervention strategies. There is dearth of health economics data from developing countries. Formal need assessment to influence resource allocation starting from policy level to the affected ones down is needed. Aims & objectives: (i) To study direct and indirect costs of mental health care in stable patients with bipolar affective disorder and their respective caregivers. (ii) To compare difference in cost of care across urban & rural area setting and its determinants.(iii) Extent of utilization of existing government social welfare measures to reduce economic burden Methods: Hospital based cross sectional study recruiting fifty stable married homemaker female patients diagnosed bipolar affective disorder (as per ICD 10) in 18-40 years age group with their caregivers following up in OPD for minimum 1 year. Tools used were specific questionnaire designed for the study, Young’s mania rating scale (YMRS) and Hamilton Depression Rating Scale (HDRS). Results: Monthly cost of treatment for bipolar disorder was Rs.2832 for urban residents & Rs.1964 for rural residents. Direct cost of illness was significantly higher for rural residents. Major determinant of direct cost was transportation and out of pocket expenditure for the indirect cost. Government provided measures to reduce economic burden are meager and extent of utilization of existing disability benefits is also very low (<20%) due to poor awareness. Conclusions: Government initiatives need to focus on increasing awareness regarding available health facilities, strengthen network of district health clinics to reduce money and time spent on travelling especially in rural areas. Since indirect cost of care is significantly high, so, efforts on providing appropriate economic respite care to patients and family caregivers should be considered to reduce ‘out of pocket expenditure’.