Centre Signs Pact with 21 States and UTs for Modified UDAN, What Will Be Next Phase of UDAN Scheme?
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Why in News?
Recently, the Ministry of Civil Aviation signed 21 MoUs with various States and Union Territories on September 22, 2026, to roll out the next phase of the Modified UDAN (Ude Desh ka Aam Naagrik) scheme.
What is Modified UDAN Scheme?
- About: Modified UDAN (Ude Desh ka Aam Naagrik) is the next-generation version of the Regional Connectivity Scheme (RCS–UDAN) designed to deepen affordable air connectivity beyond metropolitan centres.
- It seeks to connect unserved and underserved regions, particularly Tier-2/Tier-3 cities, remote, hilly, island and aspirational areas.
- Launch: The Union Cabinet approved Modified UDAN on 25 March 2026 for FY 2026–27 to FY 2035–36, giving it a 10-year implementation horizon.
- Implementation: It is implemented by the Ministry of Civil Aviation, with the Airports Authority of India (AAI) serving as the implementing agency for UDAN.
- The Ministry of Civil Aviation, participating States/UTs and AAI jointly identify, develop and operationalise aviation assets according to local connectivity requirements.
- After infrastructure identification, the next phase will use route bidding, under which airlines bid for identified UDAN routes.
- Outlay: Modified UDAN carries a total ₹28,840-crore outlay, financed through Government of India budgetary support.
- Need: The original scheme demonstrated that route subsidies alone cannot guarantee long-term regional connectivity.
- Smaller aerodromes face high recurring O&M costs and limited revenues.
- A report by the Comptroller and Auditor General of India (CAG) revealed that only 7% to 10% of routes remained financially viable after their initial subsidy window expired.
- Initial three-year cap on Viability Gap Funding (VGF) was too short for regional airlines to stimulate sufficient demand and establish a self-sustaining passenger base in Tier-2 and Tier-3 markets.
- By February 2026, out of the 663 routes operationalized, 327 routes (nearly 50%) fell completely into disuse.
- 15 out of 95 airports revived at a high public cost stopped functioning entirely.
- Focus Areas: Modified UDAN rests on four identified pillars: passenger affordability, operational sustainability, transparent Challenge Mode and indigenous manufacturing.
- The scheme specifically broadens aviation access to remote, hilly, island and aspirational districts, combining airports, airstrips and helipads.
- Components:
- Modified UDAN proposes development of 100 airports from existing unserved airstrips, with ₹12,159 crore allocated over eight years.
- Recognising that creating airports is insufficient without sustainable operations, the scheme provides three years of O&M support for approximately 441 aerodromes.
- The ceiling is ₹3.06 crore annually per airport and ₹0.90 crore per heliport/water aerodrome, with an estimated allocation of ₹2,577 crore.
- The scheme proposes 200 modern helipads at an estimated ₹15 crore each, with a total projected requirement of ₹3,661 crore. Their focus is hilly, remote, island and aspirational regions, where helicopters can provide rapid last-mile connectivity, healthcare access and emergency response.
- Airline operators will continue receiving Viability Gap Funding (VGF) to operate routes that may initially lack commercial viability.
- Modified UDAN provides ₹10,043 crore over ten years, with airline support for five years and a tapering mechanism from the third year, intended to encourage eventual commercial sustainability.
- To address shortages of aircraft suitable for difficult regional terrain, the scheme proposes procurement of two HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air.
- This connects regional aviation policy with Atmanirbhar Bharat and domestic aerospace manufacturing.
- Collectively, these interventions target 120 new destinations and 4 crore additional passengers over the next decade.
- Challenge Mode Portal: The Challenge Mode Portal, launched on 22 September 2026, allows State Governments and UT Administrations to nominate airstrips and helipads for development.
- This represents a shift towards bottom-up identification of aviation assets.
- Commitments: On September 22, 2026, the Ministry of Civil Aviation signed 21 Memorandums of Understanding (MoUs) with various Indian States and Union Territories (UTs):
- North & West: Rajasthan, Punjab, Uttarakhand, Gujarat, and Uttar Pradesh.
- East & Northeast: Bihar, West Bengal, Odisha, Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura.
- South & Central: Andhra Pradesh, Karnataka, Tamil Nadu, Telangana, and Chhattisgarh.
- States and the Centre committed to promoting domestic aviation manufacturing, and expanding helicopter networks.
Achievements of UDAN Scheme
- Launch: UDAN (Ude Desh ka Aam Nagrik) — is the Regional Connectivity Scheme (RCS) of the Ministry of Civil Aviation.
- It was launched on 21 October 2016, following its conceptualisation under the National Civil Aviation Policy 2016.
- Its central objective was to make flying more accessible and affordable while connecting Tier-2 and Tier-3 cities with the wider aviation network.
- First Flight: The first UDAN flight operated on 27 April 2017 between Shimla and Delhi.
- The original model combined market-based airline selection with government financial support.
- Routes: UDAN 1.0 awarded 128 routes to five airlines, covering 70 airports, including 36 new airports.
- UDAN 2.0 expanded coverage to 73 underserved/unserved airports and introduced helipads.
- UDAN 3.0 introduced tourism routes, seaplanes and greater Northeast coverage, while UDAN 4.0 strengthened connectivity to hilly, Northeastern and island regions, including greater helicopter and seaplane emphasis.
- Airport Expansion: By 28 February 2026, UDAN had operationalised 663 routes across 95 airports, heliports and water aerodromes, with more than 3.41 lakh flights carrying 162.47 lakh passengers.
- India’s airport network increased from 74 operational airports in 2014 to 159 in 2024, while official 2026 material reports 165 operational airports by 2026.
- By 22 September 2026, the cumulative figures had risen to 687 routes, 95 aerodromes, over 3.66 lakh flights and around 1.71 crore passengers.
- Affordable Air Travel: By April 2025, the government reported ₹4,023.37 crore disbursed as VGF; the later Ministry dashboard reports ₹4,881.10 crore in VGF and 3.58 lakh flights as of 30 June 2026.
- Economic Growth: Boosted tourism, trade, and accessibility in remote, hilly, and underserved Tier-2 and Tier-3 locations like Diu, Pithoragarh, and Rourkela.
- Allied Initiatives:
- The regional aviation ecosystem includes Krishi UDAN, which supports air logistics for agricultural produce, particularly from hilly and tribal regions.
- The government issued seaplane guidelines in August 2024 and UDAN Round 5.5, involving identified water bodies.
- UDAN Yatri Cafés, Flybrary, and free Wi-Fi services are part of passenger-centric initiatives, enhanced comfort and affordability.
Frequently Asked Questions (FAQs):
1. What is the Modified UDAN Scheme 2026?
Modified UDAN is a ₹28,840-crore, ten-year regional aviation scheme for FY2026–27 to FY2035–36.
2. What is the next phase of the UDAN Scheme?
The next phase introduces Challenge Mode, State-led aerodrome identification and competitive airline route bidding for underserved regions.
3. Which 21 States and UTs signed the UDAN pact?
Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Himachal Pradesh, Karnataka, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Punjab, Rajasthan, Sikkim, Tamil Nadu, Telangana, Tripura and Uttar Pradesh.
4. What is the main objective of the Modified UDAN Scheme?
Its objective is to expand affordable, sustainable regional air connectivity to underserved and unserved areas, including remote and difficult regions.
5. How will the new phase improve regional connectivity?
States can nominate airstrips and helipads, while airlines bid competitively for routes, expanding connectivity based on local requirements.
6. What is the Regional Connectivity Scheme UDAN?
UDAN (Ude Desh ka Aam Nagrik), launched in October 2016, promotes affordable connectivity to unserved and underserved airports through concessions and VGF.
7. What changes have been introduced in the Modified UDAN Scheme?
Major changes include Challenge Mode, State-recommended routes, revised seat-cap rules, O&M support, VGF, indigenous aircraft acquisition and stricter airline bidding conditions.
Disclaimer: Information in this article is based on official announcements and public records. Details may evolve over time.
