UDAN Scheme
Regional Connectivity and Viability Gap Funding
The UDAN (Ude Desh ka Aam Nagrik) scheme, launched in 2016 under the National Civil Aviation Policy (NCAP) 2016, aims to make air travel affordable for ordinary citizens by connecting underserved and unserved airports through subsidised fares and Viability Gap Funding (VGF) support to airlines operating on designated regional routes. The scheme represents a government recognition that aviation market failures — insufficient passenger volumes on short routes — require temporary subsidies to establish air connectivity in smaller cities before routes become commercially self-sustaining.
- Launch: October 2016 under NCAP 2016; implemented by the Ministry of Civil Aviation.
- Mechanism: Airlines bid to operate routes with minimum connectivity at capped fares (₹2,500 for one-hour flights); government pays VGF — originally for 3 years, extended to 5 years per route.
- Modified UDAN (2026–2036): Cabinet approved ₹28,840 crore outlay for 10 years; includes development of 100 new airports from existing unserved airstrips (capex ₹12,159 crore).
- Progress: As of early 2026, 925 routes awarded; 663 operationalised; 3.41 lakh flights operated; 162.47 lakh passengers carried since launch.
- ATF support under UDAN: Central excise duty on ATF reduced to 2% for UDAN routes; states advised to cap VAT at 1% for these routes.
- Budget allocation FY27: ₹550 crore for Regional Connectivity Scheme (up from ₹434.50 crore in FY26 revised estimates).
● Tracked since March 01, 2026 · last seen March 27, 2026 · updates as the daily brief publishes
See it in today’s brief.
Daily current affairs with every static concept explained in place.
Read the daily brief