Modified UDAN scheme gets Cabinet nod with Rs 28,840 crore outlay

The Union Cabinet approved the Modified UDAN scheme for ten years with a Rs 28,840 crore outlay. It aims to enhance regional air connectivity by developing 100 airports and 200 helipads, and providing Viability Gap Funding to airlines.

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the launch and implementation of the Regional Connectivity Scheme - Modified UDAN - for ten years from FY 2026-27 to FY 2035-36. It has a total outlay of Rs 28,840 crore with the budgetary support of the Government of India.

The Modified Udan aims to enhance regional air connectivity to underserved and unserved areas while supporting affordable air travel for common citizens. Briefing the media on the Cabinet decisions on Wednesday, Union Minister Ashwini Vaishnaw provided details on the scheme's implementation framework.

Enhancing Connectivity and Economic Growth

The government intends to use the outlay to boost economic growth, trade, and tourism in Tier-II and Tier-III cities. This modification of the existing scheme is expected to improve emergency response and healthcare access in remote and hilly regions, while ensuring greater viability and sustainability for regional aerodromes and airline operators.

Key Components and Financial Allocation

Infrastructure Expansion and Airport Development

A major component of the scheme involves the development of 100 airports from existing unserved airstrips. The infrastructure expansion, categorized under capital expenditure, is allocated Rs 12,159 crore over the next eight years. The move is designed to transform the country into a globally competitive aviation ecosystem, aligning with the Viksit Bharat 2047 vision.

Operational Support for Aerodromes

Alongside airport development, the scheme addresses the operation and maintenance of aerodromes. Vaishnaw noted that because regional-only aerodromes face limited revenue streams and high recurring costs, the government will provide O&M support for three years. This assistance is capped at Rs 3.06 crore per annum for each airport and Rs 0.90 crore for heliports and water aerodromes. The government estimates a total requirement of Rs 2,577 crore to support approximately 441 aerodromes under this provision.

Heliport Development for Remote Areas

To solve connectivity challenges in hilly, remote, and island regions, the scheme entails development of 200 modern helipads. These facilities, focusing on priority and aspirational districts, will cost approximately Rs 15 crore each, totaling Rs 3,661 crore over eight years.

Viability Gap Funding for Airlines

Furthermore, the scheme provides Viability Gap Funding (VGF) to airline operators to sustain regional routes. The government proposed a VGF allocation of Rs 10,043 crore over the ten-year duration to allow for necessary market development.

Boosting Indigenous Aerospace Sector

The scheme also includes a push for the indigenous aerospace sector under the Atmanirbhar Bharat vision. To address the shortage of small aircraft, the government will procure two HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air. These assets are intended for operations in difficult terrains where standard commercial fleets face limitations.

Legacy of the Original UDAN Scheme

The original UDAN Scheme, which began in October 2016, provided the foundation for these new measures. According to data shared during the briefing, 663 routes have been operationalized across 95 airports, heliports, and water aerodromes as of February 28, 2026. Over the last nine years, more than 3.41 lakh flights operated under the scheme, carrying 162.47 lakh passengers.

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