UDAN Scheme

GS Paper III Indian Economy

Context:

Sixteen airports constructed under the government’s Regional Connectivity Scheme (RCS) UDAN are lying unused, of the 74 airports operationalised under the scheme.

About UDAN (Ude Desh ka Aam Naagrik)Scheme:

UDAN is a regional airport development program of the Government of India and part of the Regional Connectivity Scheme (RCS) of upgrading under-serviced air routes. Its goal is to make air travel affordable and improve economic development in India.

Key Features:

Nodal Ministry: The UDAN Scheme is a key component of the National Civil Aviation Policy (NCAP) which was released by the Ministry of Civil Aviation on 15 June 2016.
Affordability: Make air travel affordable for the general public. Hence airfare on a certain number of seats in an aircraft are capped.
Viability Gap Funding (VGF): VGF support is a monetary assistance that is provided by MoCA to the airline operator to enable them to successfully run the routes. VGF support is market determined, though a competitive bidding mechanism where the airline operators bid for the route in the form of VGF per seat.
Funding Pattern: The scheme is jointly funded by the central government and state governments.

News Source: The Hindu