Cabinet Approves Modified UDAN Scheme (UDAN 2.0)
Why focus: Flagship scheme renewal with numeric targets (100 airports, FY27-FY36); highly testable in GS3 Economy How-Many-Correct formats.
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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Scheme Duration: BEFORE, the scheme ran in shorter phases with limited visibility. NOW, it has a guaranteed ten-year horizon (FY 2026-27 to FY 2035-36) with a fixed Rs 28,840 crore budgetary support.
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VGF Duration: BEFORE, Viability Gap Funding (VGF) for airlines was strictly capped at 3 years per route. NOW, VGF support is extended to a 5-year window per route to ensure long-term route maturity.
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Infrastructure Capex: BEFORE, UDAN largely relied on utilizing existing operational or semi-operational airports. NOW, Rs 12,159 crore is strictly earmarked for converting 100 completely unserved, bare-bones airstrips into fully functional airports.
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O&M Support: BEFORE, airport operators bore the heavy recurring costs of running loss-making small airports. NOW, the government provides Operations and Maintenance (O&M) support for 3 years, capped at Rs 3.06 crore per annum per airport.
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Helipad Infrastructure: BEFORE, heliport development was sporadic. NOW, there is a dedicated Rs 3,661 crore budget to build 200 modern helipads (at Rs 15 crore each) focused on hilly, island, and aspirational districts.
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Aircraft Procurement: BEFORE, airlines relied almost entirely on leasing foreign aircraft. NOW, the scheme mandates procurement of indigenous HAL Dhruv helicopters and HAL Dornier aircraft (for Pawan Hans and Alliance Air) under the Atmanirbhar Bharat vision.
What Did NOT Change
The core philosophy of a 'Public Service Obligation' - keeping fares capped for a certain percentage of seats - remains firmly intact. Furthermore, the scheme continues to deliberately avoid funding massive, expensive Greenfield airport projects, choosing instead to focus purely on Brownfield upgrades of existing unutilized airstrips to keep costs low.
Prelims Angle
NCERT Connection
Common Misconceptions
✗ UDAN strictly acts as a consumer subsidy scheme for cheaper airline tickets.
✓ While ticket subsidies (VGF) exist, a massive portion of the Rs 28,840 crore budget (Rs 12,159 crore) is Capital Expenditure dedicated to the physical construction of terminals and runways at 100 unserved airstrips.
Media coverage heavily focuses on the 'Rs 2,500 per hour flight' headline, obscuring the massive brick-and-mortar infrastructure component of the scheme.
✗ The scheme will result in the construction of 100 brand new Greenfield airports across India.
✓ The scheme strictly focuses on Brownfield development - reviving and upgrading existing, unused airstrips rather than acquiring new land to build Greenfield airports from scratch.
The term '100 new airports' is frequently used in press releases, which people mistakenly interpret as Greenfield construction.
Practice Questions
Q1
How Many CorrectConsider the following statements regarding the Modified UDAN (UDAN 2.0) scheme approved in March 2026: 1. The Viability Gap Funding (VGF) support for airlines has been reduced from 5 years to 3 years to ensure faster financial independence of routes. 2. The scheme allocates specific funds for the procurement of indigenous aircraft such as HAL Dornier and HAL Dhruv. 3. It introduces an Operations and Maintenance (O&M) subsidy capped at Rs 3.06 crore per annum to help operators sustain regional aerodromes. How many of the above statements are correct?
Q2
Match the FollowingMatch the funding components of the Modified UDAN scheme (List I) with their primary objectives (List II): List I: A. Viability Gap Funding (VGF), B. Operations & Maintenance (O&M) Support, C. Aerodrome Capex, D. Atmanirbhar Bharat Component. List II: 1. Direct operational subsidy to airlines for flying unprofitable routes, 2. Financial assistance to airport operators for recurring airport running costs, 3. Upgrading existing unserved airstrips into functional airports, 4. Procurement of HAL Dhruv and Dornier aircraft. Select the correct code:
Q3
Assertion & ReasonAssertion (A): The Modified UDAN scheme prioritizes the development of existing unserved airstrips over the construction of new Greenfield airports. Reason (R): Greenfield airports require substantially lower capital expenditure and land acquisition efforts compared to upgrading existing airstrips. Select the correct answer: