Modified UDAN Scheme: Revamping Regional Connectivity

Context

The Regional connectivity scheme is the Modified UDAN ( Ude Desh ka Aam Nagrik ) endorsed by the Union Cabinet with an outlay of 28,840 crore in the years FY 2026-27 to FY 2035-36. The revised scheme, which is based on the flagship regional airport development program, which was introduced in 2016, will change its course towards expansion by being long-term sustainable, affordable and connected to Tier-2 and Tier-3 cities, remote locations and North-East.

Context and Need for Modification

Although the initial UDAN program (2016) has operationalized 663 routes and linked 95 airports/helipads by Feb 2026, it was not sustainable.

• Large Discontinuation Rates: Research studies indicated that more than 9 out of 10 routes failed to sustain themselves once the 3-year subsidy phase ended.
• Infrastructure Shortage: A lot of the reopened airports had low traffic and operating capabilities.
• Demand of Longer Period Support: The three-year subsidy could not be adequate to develop the market in regional routes.

Key Pillars and Features of Modified UDAN

In the new plan (2026-2036), structural reforms are provided to tackle these challenges:

1. Extended Viability Gap Funding (VGF): To achieve self-sustenance of routes, the subsidy window is obtained up to three to five years among airlines.
2. Direct Budgetary Support: As opposed to the earlier model where a levy on profitable routes financed the subsidies, the subsidies will now be financed directly by the government exchequer.
3. Massive Infrastructure Expansion:
   1. • 100 New Airports: It will expand the 100 airports out of the current unserved/underserved airstrips with an investment of 12,159 crore in eight years.
      • 200 Modern Helipads: It will invest 3,661 crore to construct helipads that will improve the last-mile connectivity in rocky and island areas.
4. Support of Low Traffic Airports: This will involve subsidizing the operations and maintenance (O&M) expenses of approximately 441 low-traffic aerodromes by the government to avoid closure.
5. Pay attention to Indigenous Aviation: HAL Dhruv helicopters and HAL Dornier planes are purchased to serve in hard-to-reach areas, which will benefit Atmanirbhar Bharat.

Objectives of the Modified Scheme

• Democratizing Skies: Maintaining the cap on airfares (historically ₹2,500/hour for 50% seats) to keep air travel affordable.
• Growing Connections: Agenda 120 new destinations and 4 crore new passengers by the decade.
• Regional Development: Enhancing tourism, trade and economic activity in unexplored regions especially in North-East, Bihar and aspirational districts.

Significance for India

• Economic: Improves trade in the area, provides employment in hospitality and gives backing to local economies.
• Social Outcomes: Enhances the response time to emergencies and access to healthcare in remote areas.
• Sustainability: Directly acts on the fact that there has been a high failure rate of the previous routes and this makes the aviation ecosystem more sustainable.

Challenges and Future Outlook

Although the funding has increased six times, the achievement of the success will depend on speedy acquisition of land by state governments, to contain high aviation turbine fuel (ATF) prices, and guarantee the engagement of private operators in remote locations. The modified UDAN is the strategic undertaking that looks into achieving the Viksit Bharat 2047 vision that seeks to establish an inclusive, sustainable, and competitive aviation industry.

Source: The Hindu

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