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India clears revamped UDAN plan with $3 billion outlay
The Modified UDAN Scheme has been approved from the period of FY 2026-27 to FY 2035-36.
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IANS - Thu, 26, Mar 2026
- 18:04 EDT
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UDAN Scheme / Wikipedia
The Cabinet, chaired by Prime Minister Narendra Modi, on March 23 approved the Regional Connectivity Scheme-Modified UDAN for a period of 10 years with a total outlay of $3.07 billion, with the budgetary support of the Central Government.
The Modified UDAN Scheme has been approved for the period from April 1, 2026, to March 31, 2036.
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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 $1.29 billion 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 about $326,000 per annum per airport and about $96,000 per annum per heliport/water aerodrome, estimated at $274.15 million for around 441 aerodromes.
Moreover, to address connectivity challenges in hilly, remote, island and aspirational regions, the Scheme proposes developing 200 modern helipads at about $1.6 million each, amounting to a total requirement of $389.47 million 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.
Recognising the need for longer market development, VGF support to airline operators is proposed amounting to $1.07 billion over 10 years, according to the Cabinet.
To address the shortage of small fixed-wing aircraft and helicopters, the scheme also proposes to procure two HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air.
The original UDAN Scheme was launched in October 2016 with the objective of making air travel affordable and strengthening connectivity to tier 2 and 3 cities.
Over the nine years of implementation, 663 routes have been operationalised across 95 airports, heliports and water aerodromes (as on Feb. 28, 2026). More than 3.41 lakh flights have been operated, carrying 162.47 lakh passengers.
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