Centre Proposes Rs. 30,000-Crore Modified UDAN Scheme

UDAN Scheme Latest News

• The Government of India has proposed an outlay of Rs. 30,000 crore for a revamped version of the UDAN (Ude Desh Ka Aam Nagrik) regional air connectivity scheme, aiming to extend the initiative beyond April 2027 and expand air access to underserved and remote regions. 

Overview of the Modified UDAN Scheme

• The refreshed and expanded UDAN framework focuses on strengthening regional aviation infrastructure, making air travel affordable, and supporting airlines to operate in difficult terrains. Out of the Rs. 30,000 crore proposed:
  • Rs. 18,000 crore is allocated for new airport development, including greenfield airports, refurbishment of existing airstrips, and construction of heliports in hilly areas.
  • Rs. 12,000 crore is earmarked for Viability Gap Funding (VGF) to encourage airlines to operate flights on regional routes despite low initial demand.
• The scheme will particularly target:
  • Hilly and remote regions,
  • Aspirational districts,
  • North-Eastern states,
  • Small towns with limited or no air connectivity.

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Evolution of the UDAN Scheme

• The UDAN scheme was launched in October 2016 as part of the National Civil Aviation Policy, with the objective of democratizing air travel by making flights accessible to the “common citizen.” 
• Prime Minister Narendra Modi inaugurated the first UDAN flight from Shimla to Delhi in April 2017. The initial support for the scheme was Rs. 8,000 crore. Since then, 649 out of 915 valid routes have been operationalised.
• These routes have connected 92 unserved and underserved airports, including 15 heliports and 2 water aerodromes, facilitating over 1.56 crore passengers across 3.23 lakh UDAN flights.
• Despite progress, several identified airports remain non-operational due to land, technical, or regulatory hurdles, necessitating a redesigned approach.

Objectives of the Modified UDAN Framework

• Connecting 120 Additional Destinations
  • The revamped scheme aims to add 120 new destinations over the next decade, expanding the national aviation map extensively.
• Enabling Four Crore Additional Passengers
  • The government plans to enable four crore passengers to benefit from regional flights over the next 10 years, significantly boosting domestic aviation.
• Supporting New Infrastructure
  • The modified version will support:
    • Small airports and airstrips,
    • Helipads in hilly terrains,
    • Water aerodromes, ensuring holistic coverage across diverse geographies.
• Enhanced Private Sector Participation
  • The new guidelines seek to overcome earlier constraints and bring in more private players by simplifying processes related to aircraft leasing, operator permits, and route bidding.

Need for the Modified Scheme

• Several challenges have hampered UDAN’s full-scale implementation:
  • Land unavailability and delays in state government clearances,
  • Operational constraints at small airports lacking navigational or terminal facilities,
  • Shortage of suitable aircraft, particularly 20-70 seater turboprops,
  • Maintenance and leasing issues for regional carriers,
  • Low passenger demand in remote locations requires long-term subsidy support.
• The modified UDAN scheme has been structured to address these gaps through a more flexible funding model and better coordination between the Centre, states, airport operators, and airlines.

Incentives

• Airport operators and state governments will provide:
  • Reduced fuel taxes,
  • Lower airport charges,
  • Priority parking bays,
  • Faster regulatory clearances.
• New airports will receive dedicated capital support to fast-track construction and make them UDAN-ready.
• This blended financial support aims to make operations commercially viable and sustainable for regional carriers.

Expected Benefits

• Boost to Regional Connectivity
  • Connecting remote and underdeveloped regions will enhance mobility, promote tourism, and integrate local economies.
• Economic Growth and Employment
  • Airport development and increased flight operations will generate direct and indirect jobs, supporting hospitality, transport, and logistics sectors.
• Improved Emergency and Medical Access
  • Better connectivity will enable faster medical evacuation and smoother delivery of essential supplies to remote districts.
• Strengthening the North-East and Hilly Areas
  • Special focus on the North-East, Himalayan states, and Aspirational districts will help reduce regional disparities.

Source: TH