UDAN Scheme Revamp 2026

Context:

The Union Cabinet has approved a revamped UDAN (Ude Desh ka Aam Nagrik) scheme with a total outlay of ₹28,840 crore, marking a major shift in India’s regional aviation policy.

Overview of UDAN Scheme

Parameter	Details
Full Form	Ude Desh Ka Aam Naagrik
Scheme Type	Regional Connectivity Scheme (RCS)
Launch Year	2016–17 (Operationalised in 2017)
Ministry	Ministry of Civil Aviation
Latest Approval	March 25, 2026
Total Outlay	₹28,840 crore
Original Outlay (2017)	₹4,500 crore (10 years)

What is UDAN Scheme?

UDAN is a flagship regional connectivity scheme launched in 2017 to:

• Make air travel affordable
• Improve connectivity to Tier-2 and Tier-3 cities
• Revive unserved and underserved airports

Key Changes in UDAN Revamp 2026

Extension of Subsidy Period

• Subsidy extended from 3 years to 5 years
• Ensures better sustainability of routes

Shift in Funding Model

• Earlier: Funded through RCS levy on airfares
• Now: Funded directly by the government exchequer

This reduces burden on passengers and ensures stable funding.

Massive Increase in Outlay

• New outlay: ₹28,840 crore
• Earlier allocation: ₹4,500 crore
• Nearly six-fold increase

Support for Airline Operations

• ₹10,043 crore allocated for:
  • Viability Gap Funding (VGF)
  • Supporting airlines on regional routes

Airport Development

• 100 new or revived airports
• Outlay: ₹12,159 crore over 8 years

Operations and Maintenance Support

• Financial support for:
  • Low-traffic airports
  • Remote locations
• Cap:
  • ₹3.06 crore per airport
  • ₹90 lakh per heliport/water aerodrome

Expansion of Last-Mile Connectivity

• Development of 200 helipads
• Cost: ₹15 crore per helipad

Aircraft Procurement

• Addition of:
  • HAL Dhruv helicopters
  • HAL Dornier aircraft

Supports regional operators like:

• Pawan Hans
• Alliance Air

Key Features of UDAN

Affordable Airfare

• Cap of ₹2,500 per hour of flight for 50% seats

Viability Gap Funding

• Government subsidy to airlines to operate on low-demand routes

Competitive Bidding

• Airlines bid for routes and receive subsidies