Cabinet okays modified UDAN scheme with Rs 28,840 cr outlay

The Union Cabinet on Wednesday cleared the modified regional air connectivity scheme, UDAN, for a ten-year period till 2035-36, with an outlay of Rs 28,840 crore. There will be budgetary support from the government for the modified scheme.

Briefing media persons after the Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw said 100 airports are to be developed from existing unserved airstrips under the scheme.

The total outlay for the development of the airports will be Rs 12,159 crore over the next eight years. Also, the aim is to develop 200 modern helipads, entailing a total requirement of Rs 3,661 crore over the next eight years, an official release said.

Under the scheme, airlines will be provided Viability Gap Funding (VGF) of Rs 10,043 crore over the 10-year period. UDAN or Ude Desh ka Aam Nagrik was launched in October 2016 to enhance regional air connectivity as well as make air travel more affordable.

The Modified UDAN Scheme has been approved from the period of FY 2026-27 to FY 2035-36.

This decision will result in enhanced regional air connectivity to underserved and unserved areas; boost economic growth, trade and tourism in tier 2 and 3 cities; support affordable air travel for common citizens; and improve emergency response and healthcare access in remote and hilly regions.

Also, the scheme will help greater viability and sustainability for regional aerodromes and airline operators; promote indigenous aerospace sector under Atmanirbhar Bharat and help achieve the ‘Viksit Bharat 2047’ goal.

Under the Modified UDAN Scheme, it is proposed to develop 100 airports from existing unserved airstrips to enhance regional connectivity, in line with the Viksit Bharat 2047 vision of infrastructure expansion and transforming India into a globally competitive aviation ecosystem, with a total outlay of Rs 12,159 crore over the next eight years.

Given the high recurring operation and maintenance costs and limited revenue streams for Regional Connectivity Scheme (RCS)-only aerodromes, the Scheme proposes to provide O&M support for three years capped at Rs.3.06 crore per annum per airport and Rs. 0.90 crore per annum per heliport/water aerodrome, estimated at Rs. 2,577 crore for around 441 aerodromes.

Moreover, to address connectivity challenges in hilly, remote, island and aspirational regions, the Scheme proposes developing 200 modern helipads at Rs 15 crore each, amounting to a total requirement of Rs 3,661 crore over the next eight years (inflation-adjusted), focused on priority and aspirational districts to improve last-mile connectivity and emergency response.

Under the Regional Connectivity Scheme, airline operators receive financial support in the form of VGF for operating awarded routes.