UDAN Scheme: Regional Air Connectivity Initiative Sees 27% Hike in Allocation in Union Budget 2026

The regional air connectivity scheme, UDAN, has received a higher allocation in the Union Budget for 2026-27. Budget documents show that ₹550 crore has been provided for the scheme in FY27, compared with ₹434.50 crore in the previous financial year. This works out to an increase of around 27%. 

Purpose of the Scheme 

UDAN, or Ude Desh ka Aam Nagrik, was introduced to improve air links to towns and regions that are not well connected by regular commercial flights.  

The scheme supports operations on routes serving smaller cities and remote areas, where passenger demand may be limited. Funding is also used for making unused or underused airstrips operational. 

Civil Aviation Ministry’s Total Outlay 

The overall allocation for the civil aviation ministry has seen a marginal rise in FY27. The ministry has been allotted ₹4,699.92 crore, slightly higher than the revised estimate of ₹4,688.03 crore for the current financial year ending March 31, 2026. Most of the increase is spread across specific expenditure heads. 

Provision for Customs Operations 

Within the ministry’s allocation, ₹47.39 crore has been set aside for Customs Cost Recovery charges. This amount is payable to the Airports Authority of India and its subsidiary, AAI Cargo Logistics and Allied Services Company Ltd.  

The provision covers the cost of deploying customs staff at 27 airports in tier II and tier III cities. These include 15 cargo terminals and 12 passenger terminals. 

Higher Allocations for Regulators 

Regulatory bodies under the civil aviation ministry are set to receive higher funding in FY27. The Directorate General of Civil Aviation has been allocated ₹342 crore for the year.  

The Bureau of Civil Aviation Security has received an allocation of ₹114 crore. These bodies are responsible for safety oversight and aviation security across the sector. 

No Funding for Drone PLI Scheme 

The Budget has not made any allocation for the Production Linked Incentive scheme for drones and drone components. This is despite earlier expectations that the scheme could be reintroduced or extended in the coming financial year. 

The Union Budget for 2026-27 was presented by Nirmala Sitharaman, marking her 9th consecutive Budget presentation. 

Read More: Union Budget 2026: Indian Railways Gets Allocated ₹2.93 Lakh Crore Capex, Up 5.4%! 

Conclusion 

The increase in UDAN funding is the most visible change within the civil aviation budget for FY27, while the ministry’s overall spending remains broadly unchanged. 

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