UDAN regional connectivity scheme: notes for bank exams

At a glance

UDAN (Ude Desh ka Aam Nagrik, "let the common citizen fly") is the Regional Connectivity Scheme (RCS) of the Ministry of Civil Aviation. It pays airlines a subsidy, called viability gap funding, to fly routes to unserved and under-served airports, in return for capping fares on part of the seats. It was launched in 2016 and has been extended to 2035-36 as Modified UDAN.

Key facts

Launched: 21 October 2016
Policy basis: National Civil Aviation Policy (NCAP), 2016
Ministry: Civil Aviation
Implementing agency: Airports Authority of India (AAI)
First flight: Shimla–Delhi, 27 April 2017
Original fare cap: ₹2,500 for about half the seats on a one-hour (about 500 km) flight, later indexed to inflation
Funding: viability gap funding (VGF), originally 80% from the Centre (via a levy on flights on major routes) and 20% from States
Ten-year record (Ministry factsheet, October 2026): 625 routes, 90 airports (including 15 heliports and 2 water aerodromes), more than 1.49 crore passengers
Modified UDAN: launched 4 July 2026; ₹28,840 crore for FY 2026-27 to FY 2035-36
Modified UDAN targets: 120 new destinations; about 4 crore more passengers; 100 airports from unserved airstrips; 200 helipads

How it works

The bargain. Airlines bid for a route. The one asking for the least VGF usually wins and gets exclusive rights for a fixed period. In return it must keep a set number of seats at capped fares. The Centre, States and airport operators add concessions: lower landing and parking charges, and States cut VAT on aviation turbine fuel to 1% or less.

Original vs Modified UDAN.

Feature	UDAN (2016)	Modified UDAN (2026)
Subsidy period	3 years	5 years
Funding	Partly from a levy on major-route flights	Direct budget support
Focus	Reviving unused airstrips	120 new destinations, helipads in hilly, remote and island areas, upkeep of low-traffic aerodromes

Variants. Krishi UDAN (air transport of farm produce, mainly from the North-East, hill and tribal areas), UDAN International (from some North-Eastern airports) and helicopter and seaplane routes.

Weak spot. Many routes stopped once the subsidy ended; only about 7–10% stayed viable on their own, a key reason for the redesign.

Timeline

2016: NCAP announced (June); UDAN launched (21 October)
2017: first UDAN flight, Shimla–Delhi (27 April)
2025: Union Budget announces a revamped UDAN for 120 new destinations
2026: Modified UDAN launched (4 July); scheme completes ten years (21 October)

Recent developments

21 Oct 2026: UDAN completed ten years. The Civil Aviation Ministry reported 625 routes and more than 1.49 crore passengers over the decade.
4 Jul 2026: Modified UDAN launched with ₹28,840 crore for FY 2026-27 to FY 2035-36, aiming at 120 new destinations.

Exam traps

UDAN is run by the Ministry of Civil Aviation, implemented by AAI; it is not a NITI Aayog or Railways scheme.
The first flight was Shimla–Delhi (2017), though the scheme was launched in 2016.
UDAN stands for Ude Desh ka Aam Nagrik.
Krishi UDAN moves farm produce; it is not a passenger scheme.
Don't confuse UDAN (aviation) with UDAY (power distribution companies) or UDID (disability ID).

Quick check

Q: Under which policy was UDAN launched? A: The National Civil Aviation Policy, 2016.
Q: Which agency implements UDAN? A: The Airports Authority of India.
Q: What is the outlay of Modified UDAN? A: ₹28,840 crore, for FY 2026-27 to FY 2035-36.

Sources

In the news

Every time this topic has appeared in our current affairs, newest first:

Week of 15–21 October 2026UDAN regional air connectivity scheme completes 10 years