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

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