The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday, Mar. 25, approved the modified regional air connectivity scheme, UDAN, for a 10-year period until 2035-36, with a total outlay of Rs. 28,840 crore. The scheme is set to receive budgetary support from the central government.
The modified Scheme has been approved for the period from FY 2026-27 to FY 2035-36.
What To Expect?
Under the modified UDAN scheme, it is proposed to develop 100 airports from the existing unserved airstrips to further enhance regional connectivity. This is being done in line with the Viksit Bharat 2047 vision of infrastructure expansion and to transform the country into a globally competitive aviation ecosystem. For the same, the government has approved a total outlay of Rs. 12,159 crore over the next eight years.
Considering the high recurring operation and maintenance costs as well as limited revenue streams for Regional Connectivity Scheme (RCS)-only aerodromes, the scheme proposes to provide O&M support for a period of three years capped at Rs. 3.06 crore per annum per airport. It will also provide Rs. 90 lakh per annum per heliport/water aerodrome. Overall, it cost is estimated at Rs. 2,577 crore for around 441 aerodromes.
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Modern Helipads And Viability Gap Funding (VGF)
The modified UDAN scheme has proposed developing 200 modern helipads at Rs. 15 crore each to address the connectivity challenges across various hilly, remote, island and aspirational regions. This amounts to a total requirement of Rs. 3,661 crore over the next eight years (inflation-adjusted). It is said to be focused on priority and aspirational districts to improve last-mile connectivity and emergency response.
To operate awarded routes, airline operators get financial support in the form of VGF under the Regional Connectivity Scheme. Amid the need for longer market development, the VGF support to airline operators has been proposed amounting to Rs. 10,043 crore over a period of 10 years.
Moreover, the scheme proposes to procure two HAL Dhruv helicopters for Pawan Hans as well as two HAL Dornier aircraft for Alliance Air. This is aimed at addressing the shortage of small fixed-wing aircraft and helicopters required to operate in remote and difficult terrains. Also, it will further advance the Atmanirbhar Bharat vision.
Why This Matters?
Originally, the UDAN Scheme was launched in October 2016, with the aim of making air travel affordable and to strengthen connectivity to Tier-2 and Tier-3 cities in the country. Over the nine years of its implementation, as many as 663 routes have been operationalised across 95 airports, heliports and water aerodromes, as on Feb. 28, 2026.
Under this, over 3.41 lakh flights have been operated that have carried 162.47 lakh passengers.
The central government has established connectivity in remote, hilly and island regions. This has significantly boosted tourism, provided healthcare access and emergency services.
Moreover, this scheme has fostered growth in regional airlines and diverse fleet operations.
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Impact Of Modified UDAN Scheme
The latest decision by the Union Cabinet will result in enhanced regional air connectivity to the underserved and unserved areas. It will boost economic growth, trade and tourism in tier 2 and 3 cities.
The scheme is aimed at making air travel affordable for common citizens and improve emergency response and healthcare access, especially in remote and hilly regions.
Further, it will help greater viability and sustainability for regional aerodromes and airline operators, besides promoting indigenous aerospace sector under Atmanirbhar Bharat. It will help the government achieve the ‘Viksit Bharat 2047' target.
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