Union Cabinet, chaired by Narendra Modi, has approved the Modified UDAN Scheme with an outlay of ₹28,840 crore for 2026–2036 to strengthen regional air connectivity and aviation infrastructure

Union Cabinet, chaired by Narendra Modi, has approved the Modified UDAN Scheme with an outlay of ₹28,840 crore for 2026–2036 to strengthen regional air connectivity and aviation infrastructure.The scheme introduces a “challenge mode” approach for developing 100 new airports from existing airstrips, alongside a major push for last-mile connectivity through helipads in remote, hilly, North-Eastern and island regions.A key reform addresses the viability issues of earlier UDAN routes, where a large number became non-operational after subsidy withdrawal.

To tackle this, the government has

¨     Extended the subsidy (VGF) period from 3 to 5 years

¨     Shifted funding from RCS levy (airfare-based) to direct budgetary support

¨     Increased overall funding nearly sixfold compared to the original scheme

¨     The scheme continues to promote affordable air travel, with capped fares on regional routes and a bidding mechanism for airlines, while also improving connectivity for healthcare, tourism, and emergency services.

About the UDAN Scheme

¨     The Government of India launched the Regional Connectivity Scheme (RCS) – UDAN (Ude Desh ka Aam Nagrik), on October 21, 2016.

¨     Implementing Agency: Ministry of Civil Aviation (MoCA).

¨     The first UDAN flight took off on April 27, 2017, connecting Shimla–Delhi.

¨     Conceptualised under the National Civil Aviation Policy (NCAP) 2016, with a 10-year vision to connect Tier-2 and Tier-3 cities through a market-driven yet financially supported model.

Achievements under RCS–UDAN

¨     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.

Key Components of the Modified UDAN Scheme

¨     Aerodrome Development (CAPEX): The scheme proposes to develop 100 airports from existing unserved airstrips with an outlay of ₹12,159 crore over eight years to enhance regional connectivity and support the Viksit Bharat 2047 vision.

¨     Operation & Maintenance (O&M) Support: To sustain RCS-only aerodromes, O&M support will be provided for three years, capped at ₹3.06 crore per airport and ₹0.90 crore per heliport or water aerodrome annually, with a total estimated cost of ₹2,577 crore covering around 441 aerodromes.

¨     Development of Modern Helipads: The scheme includes the development of 200 helipads in hilly, remote, island, and aspirational regions at ₹15 crore each, with a total outlay of ₹3,661 crore over eight years to improve last-mile connectivity and emergency response.

¨     Viability Gap Funding (VGF): Viability Gap Funding of ₹10,043 crore over ten years will be provided to airline operators to support route operations and ensure long-term market sustainability under the Regional Connectivity Scheme.

¨  Atmanirbhar Bharat Aircraft Acquisition: The scheme proposes procurement of two HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air to strengthen regional aviation in remote and difficult terrains while promoting indigenous manufacturing.