Cabinet clears ₹28,840 cr modified UDAN scheme for regional connectivity

The Cabinet has approved a modified UDAN scheme aimed at expanding regional air connectivity, strengthening infrastructure, and improving affordability, said Union minister Ashwini Vaishnaw on Wednesday.

 

Under the revamped plan, the government will develop 100 new airports and 200 helipads, with a focus on hilly regions, the Northeast, island territories and aspirational districts.

 

"The scheme also provides for viability gap funding of 80–90 per cent for airlines, tapered over five years, along with operational support for airports and heliports to manage high costs. Budgetary allocations include over ₹12,000 crore for airports, ₹3,600 crore for helipads, and additional support for airline operations and maintenance," Vaishnaw said.

   

“The revamped Regional Connectivity Scheme will be implemented over a 10-year period from FY 2026–27 to FY 2035–36, with a total outlay of ₹28,840 crore,” he added.

 

“We will be using existing aerodromes, they will be upgraded; no greenfield projects are involved, that is different,” Vaishnaw said.

 

The scheme also addresses operational challenges faced by regional aviation players.

 

Recognising the high cost and low revenue potential of smaller routes, the government has proposed viability gap funding (VGF) support amounting to ₹10,043 crore over the scheme period.

 

“In this modified scheme, considering previous experiences, full VGF will be given for two years,” the minister said, adding that support would later be tapered. Additionally, operations and maintenance (O&M) support worth ₹2,577 crore has been provisioned, capped at around ₹3.06 crore per airport annually and ₹90 lakh per heliport or water aerodrome for three years.

 

“The criteria regarding safety remain the same. To fasten development, we are trying to upgrade areas via PPPs; regions where reform is needed will be taken up,” Vaishnaw said, indicating that the government will rely on public-private partnerships to accelerate infrastructure upgrades without compromising safety standards. “The duration of this scheme is 10 years,” he reiterated during the briefing.

 

Beyond infrastructure, the scheme also includes a push towards indigenous aviation capability under the Atmanirbhar Bharat initiative. The government has proposed the acquisition of Made-in-India aircraft, including HAL Dhruv helicopters and Dornier aircraft, to support operations in remote and difficult terrains, the Cabinet said in a press release later.

 

Addressing environmental concerns, Vaishnaw said, “Regarding aircraft manufacturing pollution, we are looking into innovations that could help minimise pollution.”

 

According to the statement, the modified UDAN scheme is expected to connect 120 new destinations and facilitate travel for around 40 million passengers, significantly expanding the reach of affordable air travel.

 

The government expects the initiative to boost tourism, trade and local economic activity, while also improving disaster response and healthcare access in remote and geographically challenging regions, it said.

 

Over nine years, the UDAN scheme operationalised 663 routes across 95 airports, heliports and water aerodromes, operated more than 341,000 flights, and carried over 16.2 million passengers.