EconomyGS3

UDAN Regional Air Connectivity Scheme Completes Ten Years

PIB·2026-10-21· Read original

"UDAN Regional Air Connectivity Scheme Completes Ten Years"

Prelims Facts

  • •UDAN was launched on 21 October 2016 under the National Civil Aviation Policy 2016.
  • •The first RCS-UDAN flight operated from Shimla to Delhi in April 2017.
+4 more facts — sign up free to unlock

Key Terms

UDAN

Regional Connectivity Scheme making regional air travel affordable and commercially viable for airlines

Viability Gap Funding (VGF)

financial support bridging the gap between an airline's cost and revenue on a subsidised route

+4 more terms — sign up free to unlock

Study Note

BackgroundCore Concept

Background

Air connectivity helps move people and goods to markets. It supports tourism and brings remote regions into the national economy. For a country as large and geographically diverse as India, flights can cut travel time. They work well across hilly and border regions where roads and railways are slow to build. The National Civil Aviation Policy (NCAP) 2016 recognised this need. It set out to make flying affordable for ordinary citizens on routes that airlines would otherwise find unprofitable.

Out of this policy came the Regional Connectivity Scheme (RCS), known as UDAN (Ude Desh ka Aam Nagrik). It was launched on 21 October 2016. Its core idea is simple: connect small towns to the aviation network. Regional flying becomes commercially viable for airlines, even where passenger demand is thin. The scheme does this by combining low airfares for passengers with financial and operational support for airlines. Routes become profitable to run, not just affordable to fly.

The scheme became operational with its first flight from Shimla to Delhi in April 2017. Since then, UDAN has gone through several versions. Each version widened its scope, from fixed-wing routes to heliports and water aerodromes. Now it includes support for indigenous aircraft.

The Topic Explained

UDAN works through a market-based bidding mechanism. Airlines bid for specific regional routes. The government selects operators based on the lowest subsidy they require. Two tools make these routes workable. First, an airfare cap keeps a share of seats affordable for passengers. Second, Viability Gap Funding (VGF) is financial support that bridges the gap between an airline's operating cost and its earnings on a regional route. The Centre and the concerned state pay this jointly. To further cut costs, the scheme has also waived certain airport charges. It has offered fuel concessions. Selected airlines receive route exclusivity for a limited period, typically three years. This allows them to recover costs without facing immediate competition. …

Sign up free to read the full noteIncludes the rest of The Topic Explained and Current Context

Practice MCQs

Economymedium

Consider the following statements regarding the Regional Connectivity Scheme (UDAN):

1.It was launched under the National Civil Aviation Policy, 2016.

2.The first UDAN flight operated on the Shimla-Delhi route.

3.Route selection under UDAN is based entirely on government nomination without airline bidding.

Which of the statements given above is/are correct?

A1 and 2 only
B2 and 3 only
C1, 2 and 3
D1 only
Sign up to check your answer & see the explanation
Economyeasy

Under the Regional Connectivity Scheme (UDAN), 'Viability Gap Funding (VGF)' refers to which of the following?

AA one-time capital grant given to airlines for purchasing new aircraft
BFinancial support that covers the gap between an airline's operating cost and revenue on a subsidised regional route
CA loan given to state governments for airport construction
DA tax rebate given to passengers flying on regional routes
Sign up to check your answer & see the explanation
Economymedium

With reference to the next phase of the UDAN scheme launched in 2026, which of the following statements is/are correct?

1.It will be implemented over a ten-year period up to FY 2035-36.

2.It includes funding for indigenous aircraft under the Atmanirbhar Bharat initiative.

3.A 'Challenge Mode Portal' allows only the Central Government to identify airstrips for development.

Select the correct answer using the code below:

A1 and 2 only
B1 and 3 only
C2 and 3 only
D1, 2 and 3
Sign up to check your answer & see the explanation
Economyhard

Match List-I (Feature of UDAN's Modified Scheme) with List-II (Key Detail) and select the correct answer using the code given below:

List-I

A.Aerodrome development (CAPEX)

B.Operation and Maintenance support

C.Modern helipads

D.Viability Gap Funding for airlines

List-II

1.Rs 10,043 crore over ten years

2.Rs 12,159 crore over eight years

3.Three years of support capped per airport/heliport

4.Rs 3,661 crore over eight years

AA-2, B-3, C-4, D-1
BA-1, B-2, C-3, D-4
CA-3, B-1, C-2, D-4
DA-4, B-3, C-1, D-2
Sign up to check your answer & see the explanation

Want the full note, Prelims Facts & MCQ answers?

Create a free account — takes less than a minute.

Create free account