Budget 2025: Government to launch modified UDAN scheme to boost regional air connectivity

The regional connectivity scheme will also support helipads and smaller airports in hilly, aspirational, and northeastern districts, she added.
The Indian government is set to launch a modified UDAN (Ude Desh ka Aam Naagrik) scheme, introducing 120 new destinations to enhance regional air connectivity.
The Indian government is set to launch a modified UDAN (Ude Desh ka Aam Naagrik) scheme, introducing 120 new destinations to enhance regional air connectivity. (File Photo | PTI)
Updated on
2 min read

The Indian government is set to launch a modified UDAN (Ude Desh ka Aam Naagrik) scheme, introducing 120 new destinations to enhance regional air connectivity.

Announcing the initiative during the Union Budget 2025-26, Finance Minister Nirmala Sitharaman stated that the revamped scheme aims to serve an additional four crore passengers over the next decade.

The regional connectivity scheme will also support helipads and smaller airports in hilly, aspirational, and northeastern districts, she added.

“With the launch of a modified UDAN scheme that will introduce 120 new destinations and bring four crore additional passengers into the fold over the next decade, the aviation landscape in India is set for a transformative shift. This initiative will not only make air travel more accessible to remote regions but will also drive economic growth and tourism, further empowering local economies,” said Ajay Singh, Chairman and Managing Director, SpiceJet.

Simran Singh Tiwana, CEO of Star Air, said the modified UDAN scheme aligns perfectly with their vision of enhancing regional connectivity by linking tier-3 and tier-2 cities directly to urban hubs, making air travel more accessible than ever.

“The revised taxation system is expected to drive significant economic growth in these emerging regions. Improved air access will not only boost tourism but also stimulate local economies, creating jobs and fostering development in previously underserved areas,” added Singh.

Introduced in 2016, the UDAN scheme has benefitted more than 1.4 crore passengers. Under the scheme, 619 routes connecting 88 airports, including two water aerodromes and 13 heliports, have been operationalised so far.

The Indian government is set to launch a modified UDAN (Ude Desh ka Aam Naagrik) scheme, introducing 120 new destinations to enhance regional air connectivity.
A dash-for-growth budget with the power to change us all at the deepest level

The Economic Survey 2024-25 highlighted that new airports and improved regional connectivity under the scheme have considerably enhanced air travel access.

However, the scheme has faced challenges. Low occupancy on several routes and financial sustainability have been major concerns. A report by the Comptroller and Auditor General (CAG) in 2023 revealed that only 52% (403 out of 774) of the awarded routes commenced operations. Among the 371 routes that started operations, only 112 (30%) completed the full concession period of three years.

The report further stated that among these 112 routes, only 54 (7% of the awarded routes) connecting 17 RCS Airports managed to sustain operations beyond the three-year concession period as of March 2023.

In addition to the modified UDAN scheme, Sitharaman announced that the government will facilitate the development of greenfield airports in Bihar to meet the state's future aviation needs.

Kinjal Shah, Senior Vice President and Co-Group Head, Corporate Ratings, ICRA Limited, said the announcements would have a positive impact on the Indian aviation sector by strengthening air connectivity in underserved and unserved regions, thus boosting passenger traffic.

“In addition, the development of the top 50 tourist destination sites, continued emphasis on spiritual and religious destinations, promotion of medical tourism, and introduction of streamlined e-visa facilities with visa-fee waivers will further boost international tourism in India,” added Shah.

Related Stories

No stories found.

X
The New Indian Express
www.newindianexpress.com