Cabinet Approves Modified UDAN Scheme with ₹28,840 Crore Outlay

On March 25, 2026, the Union Cabinet approved an upgraded version of the Regional Connectivity Scheme, Modified UDAN, to be implemented over a ten-year period from FY 2026–27 to FY 2035–36. The scheme involves a total financial outlay of ₹28,840 crore, backed by budgetary support from the Government of India, and aims to significantly strengthen regional aviation infrastructure.

Driving Regional Growth and Accessibility

The revamped scheme is expected to deepen air connectivity across underserved and unserved regions, particularly in Tier-2 and Tier-3 cities. The scheme seeks to stimulate economic activity, boost tourism, and facilitate trade in smaller cities by making air travel more accessible and affordable.

Additionally, improved connectivity is likely to enhance emergency response systems and healthcare access in remote, hilly, and island regions, areas where timely transportation can be critical.

Key Components of the Modified UDAN Scheme

• Expansion of Airport Infrastructure: The scheme proposes the development of 100 new airports by upgrading currently unused or underutilised airstrips. With an investment of ₹12,159 crore over eight years, this effort aims to significantly expand India’s aviation footprint.
• Operational Support for Aerodromes: Recognising the financial challenges of maintaining low-traffic regional airports, the government will provide operational and maintenance (O&M) support for up to three years. This includes capped annual assistance per airport and heliport, with a total estimated allocation of ₹2,577 crore covering around 441 facilities.
• Development of Modern Helipads: To address last-mile connectivity challenges, especially in difficult terrains, the scheme includes the construction of 200 modern helipads with an estimated cost of ₹3,661 crore over eight years.
• Viability Gap Funding for Airlines: The scheme allocates ₹10,043 crore over ten years to support route expansion and long-term market development. Airline operators will continue to receive financial assistance through Viability Gap Funding (VGF) to operate routes that may not be immediately profitable.
• Boost to Indigenous Aviation: To strengthen domestic aviation manufacturing, the scheme also includes the acquisition of indigenously built aircraft and helicopters. This includes procurement of HAL Dhruv helicopters for Pawan Hans and HAL Dornier aircraft for Alliance Air, supporting both operational needs and the Atmanirbhar Bharat initiative.

Also Read: India’s Health Insurance Sector Grows 9%: IRDAI Tightens Claims Timelines

Conclusion

Overall, the Modified UDAN scheme represents a strategic push to democratise air travel, enhance regional connectivity, and build a resilient aviation ecosystem. The initiative moves India closer to its long-term vision of becoming a developed nation by 2047 by bridging infrastructure gaps and encouraging domestic capabilities.

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