Centre reviews revamped UDAN scheme

The original version of the scheme was launched in October 2016 with an initial tenure of 10 years.
| Photo Credit:
REUTERS

The Centre is reviewing the proposed version of the UDAN (Ude Desh ka Aam Naagrik) regional air connectivity scheme, top sources told businessline.

The draft of the revamped scheme has been submitted to the Public Investment Board (PIB) for evaluation.

The proposal, sources said, is for a new version which will span from 2026 to 2036, and is aimed at boosting regional air connectivity across the country.

“A Cabinet note will be floated following PIB’s clearance, paving the way for the scheme’s rollout as per timelines,” sources told businessline.

“The new version is expected to address earlier challenges and attract more private participation while enhancing air access to remote areas,” they added.

The original version of the scheme was launched in October 2016 with an initial tenure of 10 years.

Boosting connectivity

The proposal for the modified UDAN scheme was announced in the Union Budget 2025-26 by Finance Minister Nirmala Sitharaman.

As per the Budget announcement, the new version aims to connect 120 additional destinations and enable the travel of four crore passengers over the next decade.

In her Budget speech, Sitharaman said the scheme will also support helipads and smaller airports in hilly areas, as well as aspirational and North-Eastern districts.

Earlier this year, Civil Aviation Minister Ram Mohan Naidu told businessline that the modified UDAN scheme is a “major move on the part of the Centre to give a continued boost to the civil aviation sector in the country.”

“Our Budget proposal for the extension of the scheme for another 10 years was based on a careful assessment of the need for continued support to operationalise and build more airports, water aerodromes, and helipads, besides aiding airlines in reaching the far-flung areas of the country that have had no air services ever,” he had said.

“We have already seen the benefits that the scheme has brought to the entire country.”

160 operational airports

Since its launch, the UDAN scheme has made notable strides in improving regional air connectivity.

The scheme has operationalised more than 600 routes, including helicopter services, and has contributed to doubling the number of operational airports in the country — from 74 in 2014 to over 160 by 2024.

Currently, the scheme operates under a market-driven model, allowing airlines to assess passenger demand and propose routes during bidding rounds.

Furthermore, it incentivises the development of new airports and the upgrade of existing ones, while providing airlines with viability gap funding (VGF).

Additionally, the scheme offers a range of concessions from airport operators as well as the Central and State governments.

Published on September 22, 2025