The Cabinet, led by Prime Minister Narendra Modi, has given the green light to the Regional Connectivity Scheme-Modified UDAN for a decade, with a total budget of Rs 28,840 crore supported by the Central Government. This initiative, spanning from FY 2026-27 to FY 2035-36, aims to enhance air connectivity in underserved areas, boost economic activities in tier 2 and 3 cities, facilitate affordable air travel, and improve emergency and healthcare access in remote regions.
The Modified UDAN Scheme is set to enhance regional aerodromes and airline operators’ sustainability, promote the indigenous aerospace sector under Atmanirbhar Bharat, and contribute to the ‘Viksit Bharat 2047’ vision. It plans to develop 100 airports from existing unserved airstrips, aligning with the goal of infrastructure expansion to transform India into a globally competitive aviation hub, with an allocated budget of Rs 12,159 crore over the next eight years.
To ensure the viability of Regional Connectivity Scheme (RCS)-only aerodromes facing high operation and maintenance costs, the Scheme proposes 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, totaling around Rs. 2,577 crore for approximately 441 aerodromes. Additionally, the initiative aims to address connectivity challenges in hilly, remote, island, and aspirational regions by developing 200 modern helipads at Rs 15 crore each, amounting to a total requirement of Rs 3,661 crore over the next eight years.
Under the Regional Connectivity Scheme, airline operators will receive financial support in the form of VGF for operating awarded routes. The Cabinet has proposed VGF support of Rs 10,043 crore over a decade to facilitate longer market development for airline operators. Furthermore, to tackle the shortage of small fixed-wing aircraft and helicopters, the scheme suggests procuring two HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air.
The original UDAN Scheme, launched in October 2016, aimed to make air travel affordable and enhance connectivity to tier 2 and 3 cities. Over the past nine years, 663 routes have been operationalized across 95 airports, heliports, and water aerodromes, with more than 3.41 lakh flights operated, carrying 162.47 lakh passengers.
