Cabinet approves Rs 28,840 crore Modified UDAN scheme; 100 airports, 200 helipads to come up
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Context
The Union Cabinet has approved the 'Modified UDAN' scheme, a significant revamp of the (RCS-UDAN), with an outlay of Rs 28,840 crore. The scheme is extended for ten years, from FY 2026-27 to FY 2035-36, and aims to enhance air connectivity to India's smaller cities and remote regions. This builds upon the original UDAN (Ude Desh ka Aam Nagrik) scheme, launched in October 2016, which operationalized hundreds of routes but faced sustainability challenges. The modified version seeks to address these issues by creating infrastructure and providing longer-term financial support.
UPSC Perspectives
Economic
The Modified UDAN scheme is a major push for infrastructure-led growth, aiming to catalyze economic activity in Tier-2 and Tier-3 cities. A core component of this is Viability Gap Funding (VGF), a government grant to make economically justified but financially unviable projects attractive to private operators. The scheme allocates ₹10,043 crore for VGF to airlines, making it feasible for them to operate on routes with initially low passenger demand. This subsidy mechanism is crucial for achieving the scheme's social objective of affordable travel while ensuring private sector participation. The development of 100 new airports and 200 helipads represents significant capital expenditure that will have a multiplier effect on the economy, creating jobs in construction and, subsequently, in hospitality, trade, and logistics. By connecting remote areas, the scheme aims to unlock their tourism potential and integrate them more deeply into the national economy, aligning with the vision of a more balanced regional development.
Governance
From a governance perspective, Modified UDAN is a strategic intervention to address regional imbalances and enhance last-mile connectivity. The scheme's focus on developing modern helipads in hilly, remote, island, and aspirational districts is a targeted effort to improve public service delivery, especially for emergency medical services and disaster response. The , a NITI Aayog initiative, focuses on rapid development in India's most underdeveloped districts, and this scheme's alignment with it showcases convergence in government policies. However, a key governance challenge, highlighted in the performance of the original scheme, is ensuring long-term sustainability. The provision of Operations & Maintenance (O&M) support for three years to 441 aerodromes is a direct response to this challenge, acknowledging that revenue from regional airports is often insufficient to cover costs. This demonstrates a shift towards a more realistic and supportive governance framework for regional aviation infrastructure.
Geographical
The scheme will fundamentally reshape India's transport geography by creating new nodes and linkages in the national aviation network. By converting 100 unserved airstrips into functional airports, it aims to overcome geographical barriers and reduce the friction of distance for remote populations. This is particularly significant for areas with difficult terrain, such as the Himalayas and the Northeast, and for island territories where surface transport is slow or non-existent. The specific proposal to procure two (HAL) Dhruv helicopters for and two HAL Dornier aircraft for is tailored to the unique geographical requirements of such regions. This strategic infrastructure expansion is a classic example of regional planning aimed at promoting national integration and ensuring that the benefits of economic growth are more equitably distributed across the country's vast and diverse geographical landscape.