Union Budget 2025: UDAN Scheme to Add 120 New Destinations
Modified UDAN Scheme Aims to Boost Regional Air Connectivity
The Union Budget 2025 has announced a "modified" UDAN (Ude Desh ka Aam Naagrik) scheme, extending government support for the regional air connectivity initiative for another 10 years. Finance Minister Nirmala Sitharaman stated that this modified scheme will aim to connect 120 new destinations and facilitate travel for 4 crore passengers over the next decade.
UDAN Scheme's Success and Expansion
The UDAN scheme, initially launched in April 2017 for a period of 10 years, has successfully connected 88 airports and operationalized 619 routes. Building on this success, the modified version seeks to further enhance regional connectivity, particularly in Tier 2 and Tier 3 cities. While the budget announcement did not include fresh financial allocations, the scheme will continue to receive support for the next decade.
- New Destinations: The modified UDAN scheme will add 120 new destinations.
- Passenger Target: The scheme aims to carry 4 crore passengers in the next 10 years.
- Focus on Regional Connectivity: The initiative emphasizes improved connectivity to tier 2 and tier 3 cities.
- Support for Hilly and Remote Areas: The scheme will continue to support helipads and smaller airports in hilly, aspirational, and northeastern districts.
Current Status of UDAN Routes
Of the 619 routes operationalized under the initial UDAN scheme, approximately 370 are currently active, while the remaining routes have fallen into disuse. The modified scheme will seek to revitalize these routes while focusing on connecting new destinations.
Financial Aspects of the UDAN Scheme
The UDAN scheme was initially allocated ₹4,500 crore to revive unused and underused airports across the country. An additional ₹1,000 crore was allocated for the period from 2023 to 2026. Airlines participating in the scheme also receive subsidies for offering half of their aircraft seats at a discounted fare of ₹2,500 for one hour of flight. This subsidy is funded by a levy on non-UDAN flights. The levy, which was ₹5,000 at the launch, was raised to ₹6,000 from January 1, 2023, to March 31, 2023, and then to ₹6,500 from April 1, 2023, to April 30, 2027.
Challenges and Potential Improvements
Airlines have been withdrawing from certain RCS routes after the expiration of their subsidy period, indicating a need for policy adjustments. One suggestion from industry experts is to extend the subsidy period beyond three years by offering a reduced subsidy amount. Another suggestion is to prioritize routes that are not well-connected by roads or involve longer travel times, as these routes are more likely to be viable.
Industry Perspective
According to Star Air CEO Simran Singh Tiwana, the scheme should target routes with longer distances or remote locations. He highlighted the example of a flight from Pune to Kishangarh, which greatly reduces travel time for those visiting Ajmer Sharif, compared to a 36-hour train journey.
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