UDAN Scheme Completes Six Years

GS Paper III Indian Economy

Context:

The Regional Connectivity Scheme (RCS) – UDAN (Ude Desh Ka Aam Nagrik), has completed six years.

UDAN Scheme Objective: To connect the country’s under-served and unserved airports.
Nodal Ministry: Ministry of Civil Aviation
It is a vital component of India’s National Civil Aviation Policy (NCAP) 2016.
UDAN scheme created a framework based on the need and led to the formulation of:Lifeline UDAN (for transportation of medical cargo during pandemic).Krishi UDAN (value realization of agriculture products especially in Northeastern Region {NER} and tribal districts).
- International UDAN routes for North East Region to explore International Connectivity from / to Guwahati and Imphal.
Under the UDAN scheme, airfares would be capped at Rs 2,500 for half of the seats in flights traveling a distance of 476-500 kilometers.
Finance Mechanism: Viability Gap Funding (VGF) for the scheme would be shared by the Centre and the states concerned, for a limited period.

What is the Viability Gap Funding scheme?

The Viability Gap Funding (VGF) Scheme aims at supporting infrastructure projects that are economically justified but fall marginally short of financial viability.

UDAN 1.0: 5 airlines companies were awarded 128 flight routes to 70 airports (including 36 newly made operational airports)
UDAN 2.0: 73 underserved and unserved airports were announced and for the first time, helipads were also connected.
UDAN 3.0: In coordination with the Ministry of Tourism, Tourism Routes were included. In addition to Seaplanes for connecting Water Aerodromes, several routes in the North-East Region came under the ambit of the scheme.
UDAN 4.0: Gave impetus to North-Eastern Regions, Hilly States, and Islands. The operation of helicopters and seaplanes incorporated.
UDAN 5.0: Its focus is on Category-2 (20-80 seats) and Category-3 (>80 seats) aircraft and prioritizes the routes that will connect the airports that are ready for operations.
- UDAN 5.1: It is dedicated to expanding helicopter services in hilly regions to stimulate tourism, hospitality, and local economic growth.

The UDAN scheme has helped airline operators to start up and develop a sustainable business model.
Additionally, it’s providing opportunities to small regional airlines FlyBig, Star Air, and IndiaOne Air to scale up their businesses and their successful run is evidence of the fact that the scheme is creating an amiable ecosystem conducive to airline business.

News Source: PIB