PIB TrackerModified UDAN cleared with Rs 28,840 crore outlay
A ten-year revamp of India's regional air-connectivity scheme, building 100 new airports and 200 helipads to reach Tier-2, Tier-3 and remote India.
What happened
- The Union Cabinet, chaired by the Prime Minister, approved the launch and implementation of the Regional Connectivity Scheme – Modified UDAN on 25 March 2026.
- The scheme runs for ten years, from FY 2026-27 to FY 2035-36, with a total outlay of Rs 28,840 crore met entirely from the Government of India's budgetary support.
- It is a redesign — not a fresh idea — of the original UDAN launched in October 2016, scaling the regional-connectivity push and adding new spending heads such as helipads and indigenous aircraft.
- The headline physical target is to develop 100 airports from existing unserved airstrips and to build 200 modern helipads in hilly, island and aspirational regions.
- The approval bundles five distinct components — airport CAPEX, three-year O&M support, helipads, Viability Gap Funding for airlines, and an Atmanirbhar Bharat aircraft-acquisition leg.
- The stated intent ties the spend to the Viksit Bharat 2047 infrastructure vision and to affordable air travel for the common citizen.
Background & context
UDAN — the acronym expands to Ude Desh ka Aam Nagrik, literally "let the common citizen of the nation fly" — is the brand name of the Regional Connectivity Scheme (RCS). The scheme was launched in October 2016 under the Ministry of Civil Aviation as the flagship instrument of the National Civil Aviation Policy of 2016. Its founding logic was to correct a structural gap in Indian aviation: a small set of metro airports carried the bulk of traffic while hundreds of smaller airstrips, many built decades earlier, sat unserved or under-served. UDAN's answer was a market-linked subsidy — Viability Gap Funding — that makes thin regional routes commercially flyable, paired with a capped fare on a portion of the seats so that flying becomes affordable for first-time and price-sensitive flyers.
The scheme is implemented by the Ministry of Civil Aviation, with the Airports Authority of India (AAI) acting as the implementing agency that conducts the competitive bidding rounds in which airlines bid for the lowest VGF to fly a given route. Routes are awarded through periodic bidding rounds, and several specialised variants have grown around the core scheme over the years — for example a hill/North-East-focused version, an international UDAN connecting border-State cities to nearby foreign destinations, a tourism-route version (Krishi UDAN for agricultural cargo and a heritage/tourism circuit), and a Lifeline UDAN that moved medical cargo during the pandemic. The Modified UDAN approved here sits in this same RCS family — it is the next, larger phase of the same scheme rather than a new scheme with a new name.
Over its first nine years the original UDAN built a substantial base. As on 28 February 2026, 663 routes had been operationalised across 95 airports, heliports and water aerodromes. More than 3.41 lakh flights had been flown, carrying about 162.47 lakh passengers — roughly 1.6 crore people, many of them flying for the first time. Connectivity reached remote, hilly and island regions, supporting tourism, healthcare access and emergency services, and helped seed a layer of smaller regional airlines and diverse fleet operations. That record is the platform the Modified UDAN builds on; the government frames the earlier phase as having "laid a strong foundation" for this revamp.
For Prelims
- Full form: UDAN = Ude Desh ka Aam Nagrik; it is the brand name of the Regional Connectivity Scheme (RCS).
- Nodal ministry: Ministry of Civil Aviation; AAI is the implementing agency that runs the route-bidding rounds. This Cabinet clearance was routed through the Union Cabinet (central-sector funding).
- Original launch: October 2016, under the National Civil Aviation Policy 2016.
- Modified UDAN outlay & period: Rs 28,840 crore over ten years, FY 2026-27 to FY 2035-36, fully from Government budgetary support (no State cost-share head announced here).
- Component (a) — Aerodrome CAPEX: develop 100 airports from existing unserved airstrips, Rs 12,159 crore over eight years.
- Component (b) — O&M support: three years of operations & maintenance support for around 441 aerodromes, Rs 2,577 crore, capped at Rs 3.06 crore/year per airport and Rs 0.90 crore/year per heliport or water aerodrome.
- Component (c) — Modern helipads: 200 helipads at Rs 15 crore each = Rs 3,661 crore over eight years (inflation-adjusted), aimed at hilly, remote, island and aspirational districts.
- Component (d) — Viability Gap Funding: Rs 10,043 crore of VGF to airline operators over ten years — the single largest head, and the mechanism at the heart of UDAN.
- Component (e) — Atmanirbhar aircraft: two HAL Dhruv helicopters for Pawan Hans and two HAL Dornier (Do-228) aircraft for Alliance Air.
- Progress base (as on 28 Feb 2026): 663 routes on 95 airports/heliports/water aerodromes; 3.41 lakh flights; 162.47 lakh passengers over nine years.
- The five components together: CAPEX (airports) + O&M + helipads + VGF + Atmanirbhar aircraft — a useful "how many components / match the head to the amount" set.
What it is NOT: Modified UDAN is not a brand-new scheme — it is the continuation and scaling-up of the existing Regional Connectivity Scheme that has run since 2016, so the "launch year" of UDAN remains October 2016 even though this Cabinet approval is dated March 2026. It is not funded by a fuel cess or a passenger levy in this approval; the Rs 28,840 crore is budgetary support. It is not a defence or strategic-airlift programme — the two HAL Dhruv and two HAL Dornier acquisitions are civil regional-aviation assets for Pawan Hans and Alliance Air, not military procurement. And the capped-fare benefit applies to RCS seats on awarded routes, not to all seats on every flight.
A common confusion to settle: UDAN is the scheme, RCS is its formal name, and AAI is the implementing agency — these are three labels for one ecosystem, not three separate programmes. Equally, "VGF" here is the operating subsidy paid to airlines per route; it is distinct from the CAPEX grant that builds the airport itself. The Rs 15 crore figure is the unit cost of one modern helipad, not a total.
Why it matters
The problem Modified UDAN addresses is the lopsidedness of Indian aviation. Traffic, airlines and capacity concentrate at a handful of metros, while Tier-2 and Tier-3 cities and the hill, island and aspirational districts remain poorly connected by air. Thin regional routes do not pay for themselves, so without a subsidy no airline flies them and without flights the airstrip stays idle — a chicken-and-egg trap. UDAN's design breaks that trap by guaranteeing a minimum viability to the airline (VGF) while building or reviving the physical airport (CAPEX), and the Modified version widens this to terrains where even fixed-wing aircraft struggle, hence the 200 helipads and the helicopter acquisitions.
The wider stakes are economic and social. Better regional air links feed trade and tourism in smaller cities, improve emergency response and healthcare access in remote and hilly regions, and support affordable travel for the common flyer — the explicit "Aam Nagrik" promise in the scheme's name. The Atmanirbhar Bharat component adds an industrial-policy angle: by routing demand to HAL's indigenous Dhruv helicopter and Dornier Do-228 aircraft, the scheme is meant to deepen the domestic aerospace manufacturing base rather than import small aircraft. The government positions the whole package as a step toward the Viksit Bharat 2047 goal of a globally competitive aviation ecosystem and broad-based infrastructure expansion.