UDAN was first conceived in 2016. It intended to address independent India's neglected inequities as air travel had remained a luxury for decades
The recently approved revised UDAN scheme by the Union Cabinet, backed by an ambitious budget allocation of Rs 28,840 crores, is an important milestone for India's inclusive growth. The revised scheme is not just a policy reboot but a renewed national commitment to the idea that development must reach the last people of the country.
UDAN was first conceived in 2016. It intended to address independent India's neglected inequities as air travel had remained a luxury for decades. The number of functional airports in 2014 was 75. After the inception of UDAN, in a decade, this figure jumped to 114. Over 600 air routes have been made functional and over 1.63 crore passengers have benefited.
However, the scheme had some operational limitations as well. Several routes remained commercially unstable. Smaller airports, once inaugurated with enthusiasm, fell dormant when the economics of their operation proved unsustainable. The subsidy was partly drawn from levies on tickets for busier domestic routes. This was quietly transferring a portion of the financial burden onto ordinary passengers. These limitations have now been strategically addressed in the revised framework.
The revised UDAN scheme is based on five key components. The first, is the decentralisation of aviation infrastructure across the country. An investment of Rs 12,159 crores has been delegated toward the redevelopment of 100 airports across the country. The scheme also aims to relieve the congestion that burdens India's largest urban centres by creating modern aviation hubs in cities beyond the metropolitan cities. This will disperse economic opportunity more evenly across the nation.
The extension and reform of Viability Gap Funding (VGF) is the second element of the scheme. Under the earlier mechanism, this support was provided for a period of three years and after that airlines were expected to sustain operations independently. Practically, this time period proved insufficient for many routes. The revised scheme extends VGF support to five years which will provide a breathing room to the airlines and ultimately will help develop viable long-term strategies for these routes.
The third structural reform is related to its financing model. Previously, a portion of the scheme's resources was generated through a levy imposed on tickets for high-traffic domestic routes. This arrangement was taxing one set of passengers to subsidise another. The revised scheme abolishes this arrangement and replaces it with direct government financing from the government exchequer. This change will have long term implications.
The absence of support for the ongoing operations and maintenance of regional airports was the most evident gap in the original scheme. The fourth element of this scheme deals with infrastructure issues. The revised scheme extends government support beyond the construction phase to cover the day-to-day operational costs of smaller airports which struggle to generate ample revenue from passenger traffic alone. This commitment to sustaining what has been built, rather than simply building and moving on, reflects a more mature and realistic understanding of what inclusive connectivity actually requires.
The fifth element is related to the India's broader aspirations for technological self-reliance. Aligning with the Atma Nirbhar Bharat initiative, the revised scheme prioritises the deployment of indigenously manufactured aircraft and helicopters, including two HAL Dhruv helicopters for Pawan Hans Limited and two HAL Dornier aircraft for Alliance Air.
The construction of 200 modern helipads across India's most challenging terrains is another ambitious step incorporated in the modified scheme. At an estimated investment of Rs 15 crores per helipad, and a total estimated budgetary outlay of Rs 3,661 crores over eight years. This initiative represents a thoughtful recognition that conventional airports are not always the appropriate solution for every geography.
The broader developmental significance of the revised UDAN scheme extends beyond the domain of civil aviation. When a Tier-2 or Tier-3 city gains reliable air access, it enters into a renewed relationship with the national economy.
— Prof. (Dr) Bhrigu Nath Singh
The writer is vice-chancellor of Rajiv Gandhi National Aviation University and a distinguished academic and professor (HAG) on lien in aerospace engineering at Indian Institute of Technology Kharagpur. The views expressed are personal.
