**Executive Summary**
The Union Cabinet has approved the "Modified UDAN" Regional Connectivity Scheme with a total outlay of Rs. 28,840 crore, to be implemented over ten years from FY 2026-27 to FY 2035-36. The scheme aims to enhance air connectivity to underserved regions, improve emergency response, and support the "Viksit Bharat 2047" vision through infrastructure expansion and financial support. Key milestones include the development of 100 airports and 200 modern helipads over the next eight years.
**Key Points / Main Content**
**Infrastructure Development (CAPEX)**
* **Airport Expansion:** Allocation of Rs. 12,159 crore over eight years to develop 100 airports from existing unserved airstrips.
* **Helipad Development:** Construction of 200 modern helipads in hilly, remote, island, and aspirational regions at a cost of Rs. 15 crore each (totaling Rs. 3,661 crore).
**Operational and Financial Support**
* **Viability Gap Funding (VGF):** Provision of Rs. 10,043 crore over 10 years to support airline operators on awarded regional routes.
* **O&M Support:** Allocation of Rs. 2,577 crore for the Operation & Maintenance of approximately 441 aerodromes.
* **O&M Caps:** Support is limited to three years, capped at Rs. 3.06 crore per annum for airports and Rs. 0.90 crore per annum for heliports or water aerodromes.
**Aircraft Acquisition and Indigenous Promotion**
* **Fleet Expansion:** Procurement of two HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air to address equipment shortages in difficult terrains.
* **Strategic Alignment:** Promotion of the indigenous aerospace sector under the "Atmanirbhar Bharat" initiative.
**Scheme Performance Background**
* **Operational Success:** As of February 28, 2026, the original scheme has operationalised 663 routes across 95 airports, heliports, and water aerodromes.
* **Passenger Volume:** Over 3.41 lakh flights have been operated, serving 162.47 lakh passengers since the scheme's inception in 2016.
**Impact Analysis**
**Airline Operators**
**Impact:**
Operators receive increased financial sustainability through Rs. 10,043 crore in VGF and expanded fleet options via government-procured aircraft.
**Action Required:**
Operators must bid for and maintain flight operations on designated regional and remote routes to qualify for VGF support.
**Regional Aerodrome Authorities**
**Impact:**
Managed facilities receive essential O&M budgetary support to offset high recurring costs and low revenue streams.
**Action Required:**
Authorities must ensure infrastructure meets operational standards for the three-year support period while adhering to annual funding caps.
**Citizens in Remote and Tier-2/3 Cities**
**Impact:**
Improved access to affordable air travel, enhanced trade and tourism, and faster emergency/healthcare response in hilly and island regions.
**Action Required:**
Stakeholders in these regions should utilize the expanded connectivity to boost local economic growth and tourism.
**Indigenous Aerospace Manufacturers (HAL)**
**Impact:**
Direct boost to manufacturing demand through the mandated procurement of Dhruv helicopters and Dornier aircraft.
**Action Required:**
HAL must fulfill the procurement requirements for Pawan Hans and Alliance Air to support operations in difficult terrains.
Key Entities Referenced
Modified UDAN (Regional Connectivity Scheme): The primary government initiative approved for ten years (FY 2026-36) to enhance regional air connectivity through aerodrome development and financial support.
Ministry of Civil Aviation: The nodal ministry responsible for the launch, implementation, and oversight of the Modified UDAN scheme.
Viability Gap Funding (VGF): A critical financial mechanism within the scheme that provides support to airline operators to ensure the economic sustainability of regional flight routes.
Viksit Bharat 2047: The national strategic vision and policy framework that the Modified UDAN scheme aims to fulfill through infrastructure expansion and aviation ecosystem transformation.
Atmanirbhar Bharat: The overarching policy initiative for self-reliance under which the scheme promotes indigenous aircraft acquisition and the domestic aerospace sector.
Ministry of Civil Aviation
Cabinet approves Regional Connectivity Scheme
– Modified UDAN with a total outlay of Rs.28,840
crore
Posted On: 25 MAR 2026 4:18PM by PIB Delhi
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the launch and
implementation of the Regional Connectivity Scheme – Modified UDAN for a period of ten years from
FY 2026-27 to FY 2035-36 with a total outlay of Rs.28,840 crore with the budgetary support of the
Government of India.
Impact:
Enhanced regional air connectivity to underserved and unserved areas.
Boost to economic growth, trade and tourism in Tier-2 and Tier-3 cities.
Support affordable air travel for common citizens.
Improved emergency response and healthcare access in remote and hilly regions.
Greater viability and sustainability for regional aerodromes and airline operators.
Promotion of the indigenous aerospace sector under Atmanirbhar Bharat.
Progress towards Viksit Bharat 2047 goal.
The key components of the scheme are as under:
(a) Development of Aerodromes (CAPEX)
Under the Modified UDAN Scheme, it is proposed to develop 100 airports from existing unserved
airstrips to enhance regional connectivity, in line with the Viksit Bharat 2047 vision of infrastructure
expansion and transforming India into a globally competitive aviation ecosystem with a total outlay of
Rs.12,159 crore over the next eight years.
(b) Operation & Maintenance (O&M) of Aerodromes
Given the high recurring O&M costs and limited revenue streams for Regional Connectivity Scheme
(RCS)-only aerodromes, the Scheme proposes to provide O&M support for three years capped at Rs.3.06
crore per annum per airport and Rs.0.90 crore per annum per heliport/water aerodrome, estimated at
Rs.2,577 crore for around 441 aerodromes.
(c) Development of Modern Helipads
To address connectivity challenges in hilly, remote, island and aspirational regions, the Scheme proposes
developing 200 modern helipads at Rs.15 crore each, amounting to a total requirement of Rs.3,661 crore
over the next eight years (inflation-adjusted), focused on priority and aspirational districts to improve last-
mile connectivity and emergency response.
(d) Viability Gap Funding (VGF)Under the Regional Connectivity Scheme, airline operators receive financial support in the form of VGF
for operating awarded routes. Recognising the need for longer market development, VGF support to
airline operators is proposed amounting to Rs.10,043 crore over 10 years.
(e) Atmanirbhar Bharat Aircraft Acquisition
To address the shortage of small fixed-wing aircraft and helicopters required for operations in remote and
difficult terrains and to advance the Atmanirbhar Bharat vision, the scheme also proposes to procure two
HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air.
Background:
The original UDAN Scheme was launched in October 2016 with the objective of making air travel
affordable and strengthening connectivity to Tier-2 and Tier-3 cities. Over nine years of implementation:
663 routes have been operationalised across 95 airports, heliports and water aerodromes (as on 28
February 2026).
More than 3.41 lakh flights have been operated, carrying 162.47 lakh passengers.
Connectivity has been established in remote, hilly and island regions, boosting tourism, healthcare access
and emergency services.
The scheme has fostered growth in regional airlines and diverse fleet operations, laying a strong
foundation for the Modified UDAN Scheme.
***
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