UDAN Scheme Latest News
- The Union Cabinet has approved a revamped UDAN Scheme with higher funding and extended subsidy support.
UDAN Scheme
- The Ude Desh ka Aam Nagrik (UDAN) scheme was launched in 2017 under the Regional Connectivity Scheme (RCS) to enhance air connectivity to underserved and unserved regions.
- Objectives
- Improve regional connectivity across Tier-2 and Tier-3 cities.
- Make air travel affordable for common citizens.
- Promote balanced regional development.
- Enhance the infrastructure utilisation of unused and underutilised airports.
- Key Features
- Airlines are selected through a competitive bidding mechanism.
- Viability Gap Funding (VGF) is provided to airlines to operate on less profitable routes.
- 50% of seats are offered at a capped fare of around Rs. 2,500 per hour of flight.
- Focus on connecting remote, hilly, and island regions.
- Funding Mechanism
- Initially funded through a Regional Connectivity Scheme levy imposed on flights operating on major routes.
- The levy subsidised airlines operating on regional routes.
- Achievements of the Scheme
- Over 600 routes have been operationalised since launch.
- More than 90 airports, including many previously unused airstrips, have been revived.
- Improved last-mile connectivity in remote areas such as the North-East and hilly regions.
- Challenges
- Low route viability after subsidy withdrawal.
- Limited passenger demand in certain regions.
- Operational challenges such as infrastructure gaps and airline sustainability.
- High discontinuation rate of routes after the subsidy period.
News Summary
- The government has approved a major revamp of the UDAN scheme to address structural issues and improve sustainability.
- Increased Funding and Scope
- The revamped scheme has a total outlay of Rs. 28,840 crore, which marks a nearly six-fold increase from the earlier allocation.
- The scheme now goes beyond airport redevelopment to include support for operations and maintenance.
- Extension of Subsidy Period
- Subsidy support for airlines has been extended from three years to five years.
- This aims to improve route viability and reduce premature discontinuation.
- Shift in Funding Source
- Subsidy funding will now come directly from the government exchequer instead of the RCS levy.
- This marks a significant policy shift in financing the scheme.
- Viability Concerns Highlighted
- The revamp was triggered by poor performance under the earlier scheme:
- Over 90% of routes fell into disuse after subsidy withdrawal.
- Only about 7%-10% of routes remained viable beyond the subsidy period, as noted by a CAG report.
- Out of 663 routes launched since 2017, 327 have been discontinued.
- Airport Infrastructure and Expansion
- 100 additional airports will be redeveloped with an outlay of Rs. 12,159 crore.
- Around 441 aerodromes will receive operational and maintenance support.
- This reflects a shift from infrastructure creation to sustained operational support.
- Focus on Last-Mile Connectivity
- Development of 200 helipads to improve connectivity in remote regions.
- Investment in helicopters and small aircraft to strengthen regional aviation networks.
- Support for Aircraft Procurement
- Procurement of HAL Dhruv helicopters for Pawan Hans.
- Procurement of HAL Dornier aircraft for Alliance Air.
- This aims to enhance fleet availability for regional routes.
Source: TH
UDAN Scheme FAQs
Q1: What is the objective of the UDAN Scheme?
Ans: It aims to improve regional air connectivity and make air travel affordable.
Q2: How does UDAN ensure affordability?
Ans: It caps fares for 50% of seats at around Rs. 2,500 per hour of flight.
Q3: What major change has been introduced in the revamped scheme?
Ans: The subsidy period has been extended from three to five years.
Q4: Why was the UDAN scheme revamped?
Ans: Due to low route viability and high discontinuation rates after subsidies ended.
Q5: How is the revamped scheme funded?
Ans: Subsidies are now funded directly from the government exchequer.