The Vision: Ude Desh ka Aam Naagrik
At the heart of India's regional connectivity strategy is the UDAN (Ude Desh ka Aam Naagrik) scheme, which translates to "Let the common citizen of the country fly". Launched in 2016, its core idea is to make air travel affordable and accessible, especially
for those in Tier-2 and Tier-3 cities. Before UDAN, India's aviation map was heavily skewed towards a few metropolitan hubs, leaving vast swathes of the country unserved or underserved. The scheme was designed to correct this imbalance by operationalizing dormant airstrips, developing new low-cost airports, and encouraging airlines to fly on routes that were not traditionally seen as commercially viable. The goal is not just transportation but also to spur economic development, tourism, and national integration by bringing smaller towns into the mainstream.
The Financial Engine: Viability Gap Funding
To make flights from smaller towns affordable, the scheme employs a mechanism called Viability Gap Funding (VGF). In simple terms, many regional routes have high operating costs and low initial demand, making them unprofitable for airlines. VGF bridges this financial gap. The government provides a subsidy to airlines for operating on these specific routes, allowing them to cap fares for a certain number of seats. For instance, the scheme originally aimed for an indicative fare of around ₹2,500 for a one-hour flight. This subsidy isn't a blank cheque; it's a performance-based grant awarded through competitive bidding, where airlines bid for the lowest subsidy they would need to operate a route. This model is funded by a levy on flights operating on profitable, high-traffic metro routes, creating a self-financing mechanism of sorts.
The Progress Report: Achievements and Headwinds
On paper, the progress has been significant. Since 2014, the number of operational airports in India has more than doubled, from 74 to over 165 as of mid-2026. As of July 2026, the UDAN scheme had operationalized around 679 routes, connecting 95 airports, heliports, and water aerodromes, and has flown over 16.8 million passengers. However, the journey has faced considerable turbulence. A major challenge is the sustainability of the routes. Many routes awarded to airlines have been discontinued after a short period. Reports have indicated that a significant percentage of operationalised routes have ceased operations, often because airlines find them financially unviable even with subsidies once the initial three-year support period ends. Small regional carriers have particularly struggled with financial health, maintenance, and a shortage of aircraft, leading some to shut down entirely. Furthermore, many designated airports have faced delays in becoming fully operational due to issues with land acquisition and infrastructure readiness.
The Path Forward: Modified UDAN and a 10-Year Plan
Recognizing these challenges, the government has launched a revamped strategy. In March 2026, the Union Cabinet approved the 'Modified UDAN' scheme, extending it for a ten-year period from FY 2026-27 to 2035-36 with a substantial outlay of nearly ₹29,000 crore. This new phase aims to develop 100 new airports from existing airstrips and build 200 modern helipads, particularly in remote and hilly areas. Critically, the modified scheme shifts the focus from just launching routes to ensuring their long-term sustainability. It includes provisions for extended financial support to airlines from three to five years and provides operations and maintenance support for struggling regional airports. The strategy is now less about just building infrastructure and more about making that infrastructure commercially viable through better network integration and demand creation.
