UDAN 5.0 Scheme

About UDAN 5.0 scheme:

• This round of the scheme focuses on Category-2 (20-80 seats) and Category-3 (>80 seats).
• The earlier stage length cap of 600 km is waived off and there is no restriction on the distance between the origin and destination of the flight.
• Viability gap funding (VGF) to be provided will be capped at 600 km stage length for both Priority and Non-Priority areas which was earlier capped at 500 km.
• Airlines would be required to commence operations within 4 months of the award of the route. Earlier this deadline was 6 months.

Key facts about UDAN (UdeDeshkaAamNaagrik)

• It is a regional airport development and “Regional Connectivity Scheme” (RCS) of the Union Government of India.
• The scheme envisages providing connectivity to un-served and under-served airports of the country through the revival of existing airstrips and airports.
• Nodal Ministry: Ministry of Civil Aviation

What are the Components of UDAN?

• Airports: The first component is to develop new airports and enhance the existing regional airports to increase the number of operational airports for scheduled civilian flights.
• Flight routes: The second component is to add several hundred financially viable, capped airfare, and new regional flight routes to connect more than 100 under-served and un-served airports in smaller towns by using “Viability Gap Funding” (VGF) where needed.

Q1) What is Viability Gap Funding?

Viability Gap Funding (VGF) is a financial instrument used by the Indian government to attract private sector investment in public-private partnership (PPP) infrastructure projects, especially in sectors such as power, transport, and water.

Source: Ministry of Civil Aviation Launches UDAN 5.0 

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