Viksit Ude Desh Ka Aam Naagrik (UDAN) (2026): A Policy Initiative For Regional Air Connectivity

Policy Update
Madhuritha D

Background

The Ministry of Civil Aviation launched the Viksit UDAN (Ude Desh ka Aam Nagrik) on 4 July 2026 for FY 2026-27 to FY 2035-36, a modified form of UDAN, launched in October 2016 which has transformed regional connectivity by operationalising 669 routes and connecting 95 airports, heliports and water aerodromes, benefitting over 1.66 crore passengers (PIB, 2026). This upgraded UDAN scheme emphasises on India’s development and self-sustainable air connectivity across the country.

The revamped scheme places a much stronger emphasis on building regional aviation infrastructure while continuing financial support for airlines. It majorly aims to connect tier 2 and tier 3 cities with indigenous aircrafts emphasising on the Atmanirbhar Bharat initiative which helps in better connectivity and economic growth. Thus, this article aims to provide a clear understanding of the difference between and significant changes in the new one while also discussing the major advantages and challenges that lie ahead in the effective implementation of the scheme.

Functioning

The main objectives of the earlier UDAN were to enhance regional air connectivity, affordable air travel, boost tourism, generate employment and most importantly encourage private participation as it uses Viability Gap Funding (VGF) to ensure financial support for the newly established or renovated airlines. The old scheme also ensured an air fare cap to keep the prices moderate and affordable throughout the year for all. However, there are significant changes in the modified UDAN.

Viksit UDAN focuses heavily on infrastructure development where the previous one emphasised only on the connectivity and affordable air fares. With an outlay of nearly ₹29,000 (28,840) crore over the next 10 years, Viksit UDAN aims to develop 100 aerodromes by reviving existing unserved and underutilised airstrips, backed by an investment of ₹12,159 crore (PIB, 2026). The specific allocations under the scheme is as follows:

Source: Press Information Bureau. (4 July 2026). Ministry of Civil Aviation, Government of India.

It is evident from the graph that the modified scheme focuses on regional connectivity through infrastructure development and not only through reviving and renovating certain routes and ports. To address the shortage of small fixed-wing aircraft and helicopters required for operations in remote and difficult terrains and to advance the Atmanirbhar Bharat vision, the scheme also proposes to procure two HAL (Hindustan Aeronautics Limited) Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air (PIB, 2026) with the fund allocation of ₹400 crores.

It is notable that the scheme provides for a fixed Viability Gap Funding where airlines can operate without fear of market fluctuations which is disbursed in a tapered model: Year 3 pays 75% of the VGF, Year 4 pays 50%, and Year 5 drops to 25% respectively. Since the prior scheme did not provide a fixed funding model and decisions were taken annually, it led to instability, irregularity and mistrust among the private investors in enhancing the air routes and ports. However, it is now enhanced under the modified one with fixed amount in total as well as the percentage of fund disbursal.

Operation and maintenance plays an important role in continuation of the air routes and ports without any hindrance. However, the previous scheme did not effectively address these concerns. Thus, the Viksit UDAN focuses on the maintenance of the newly established or renovated airports and water aerodromes for the effective progression of the scheme. This is evident in the 9 percent provided under the total fund allocation. It also focuses on bringing 200 modern helipads ensuring every last mile connectivity within the country. This highly targets hilly terrains, North-eastern region and aspirational districts in enabling medical and public service accessibility.

Overall, the government expects Viksit UDAN to significantly increase regional air travel over the next decade while driving aviation-led economic development in line with its Viksit Bharat 2047 vision.

Performance

As it has been only a month since the implementation of the scheme, it is too early to measure the performance. However, assessing the difference between the older scheme and the modified one helps in understanding both the positive and negative aspects.

Before getting into the gaps to be addressed in UDAN 2016 that are widely addressed by the modified UDAN, it is equally important to understand the achievements of the prior.

Operationalised 669 routes and connecting 95 airports, heliports and water aerodromes.
Over 1.66 crore passengers benefitted through this scheme (PIB, 2026).
Enhanced regional trade, tourism, improved air connectivity and also enabled the rise of regional airlines like Star Air, IndiaOne Air and Flybig, Fly91.
Successfully operationalised dozens of completely unserved airstrips (like Pasighat, Tezu, Jharsuguda, and Rourkela) that previously had no commercial traffic.
Disbursed over ₹4,023 crore in financial subsidies to keep airline operations viable and ticket prices capped for the public (PIB, 2025).
Introduced the popular UDAN Yatri Cafés at select airports, ensuring low-cost food options (like ₹10 tea and ₹20 snacks) to keep airport experiences pocket-friendly for first-time flyers.

One of the major challenges in UDAN 2016 was the greenfield airports. So far, 25 Greenfield airports have been accorded In-Principle Approval, of which 14 are operational, while 6 proposals have been granted Site Clearance (Ministry of Civil Aviation, 2026). To operationalise a greenfield airport, the state government is required to undertake a pre-feasibility study and submit a proposal to the Central Government for grant of Site Clearance followed by In-Principle Approval. However, among the approved airports only few are still in use. Sites such as Parandur in Tamil Nadu have become controversial as the people of the village are not willing to give up their lands and for few, appropriate compensation is not discussed properly. It also has become a political rhetoric and debate which resulted in no further operations in Parandur. According to the Ministry of Civil Aviation (2024), these are 9 airports which has given clearance but not operationalised:

Alwar in Rajasthan
Singrauli in Madhya Pradesh
Mandi in Himachal Pradesh
Kottayam in Kerala
Puri in Odisha
Doloo in Assam
Parandur in Tamil Nadu
Kota in Rajasthan
Raichur in Karnataka

To address these concerns, the modified UDAN has brought the ‘Challenge Mode’ to shift the responsibility from the centre to state governments where states have to submit development reports for further fund disbursal. This also ensures that the approval will be granted only after a proper deal is made with the land owners and the land is ready for proceeding further with infrastructure.

Earlier, the 2016 scheme did not focus on a last mile connectivity where hilly regions, north-eastern states would be connected. However, the later one widely recognised this drawback and proceeded to develop 200 more modern helipads. It is notable as helipads are feasible in hilly terrains rather than building new airports and water aerodromes. To compensate for the increasing air transport demand which was met with imported air crafts earlier, two indigenous aircrafts namely HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air are acquired which also contributes to regional aviation ecosystem and India’s objective of self-sustainability.

Unlike the original programme, which primarily focused on route expansion, Viksit UDAN places equal emphasis on ensuring the long-term viability of regional aviation infrastructure. It aims to operationalise 100 additional aerodromes, connect 120 new destinations, and facilitate air travel for 4 crore additional passengers over the next decade (PIB, 2026). Moreover, nearly half of the routes in the original UDAN framework collapsed due to low initial passenger traffic and structural issues once initial subsidies tapered off. The modified UDAN addresses the issue of low passenger demand and subsequent route discontinuations by transitionally shifting from merely subsidising tickets to extending the financial runway for airlines and directly supporting airport infrastructure upkeep through Viability Gap Funding and Operation and Maintenance Cost. However, it remains uncertain whether air connectivity can become self-sufficient, and what the source of continued subsidy support will be.

Although Viksit UDAN is still in its initial stages and its actual performance cannot yet be assessed, its design directly addresses the key weaknesses observed in the original UDAN scheme. Thus, while UDAN demonstrated impressive success in expanding regional connectivity, Viksit UDAN seeks to build on these achievements by prioritising sustainability, infrastructure support, operational resilience, and long-term regional aviation growth.

Impact

Viksit UDAN is expected to have a transformative impact on India’s regional development by making aviation a catalyst for inclusive economic growth rather than merely a mode of transport. By improving air connectivity to remote, hilly, island, border, and aspirational districts, the scheme is likely to reduce regional disparities and integrate previously isolated areas into the national economy. Better connectivity will improve access to markets, education, healthcare, and administrative services, thereby enhancing the quality of life and reducing the developmental gap between metropolitan and rural regions. It also implicitly includes employment generation with new airports, helicopters and water aerodromes which will eventually lead to a high level of recruitment in the aviation sector.

On one hand, the scheme is also expected to stimulate tourism by providing easier access to heritage sites, eco-tourism destinations, pilgrimage centres, and adventure tourism locations, generating income and employment for local communities. It also focuses on the development of Tier-1 and Tier-2 cities to promote private investment, improve accessibility, and ensure balanced urbanization across the country. From a strategic perspective, enhanced connectivity to border and remote regions will improve disaster response, emergency medical evacuation, and the rapid movement of essential supplies, while also strengthening national integration. On the other hand, the environmental cost of the Viksit UDAN scheme revolves around a sharp trade-off while expanding regional aviation drives economic growth, it accelerates carbon intensity, creates local ecological disturbances via greenfield and brownfield developments, and introduces significant high-altitude emissions into previously vulnerable micro-environments. Additionally, the scheme lacks a post-subsidy roadmap. Once funding ends, connectivity activities face market risks with no clear support. This undermines sustainability, making long-term survival and self-sufficiency unlikely for most initiatives which was also a major drawback in UDAN 2016.

Overall, the extent of these impacts will ultimately depend on effective implementation, sustained financial support, strong coordination between the Centre and States, and the commercial viability of newly connected routes.

Emerging issues

A lack of effective inter-agency coordination among the Ministry of Civil Aviation, Airports Authority of India, State Governments, airlines, and local authorities can delay airport development, route operationalisation, and supporting infrastructure. Differences in planning priorities, approval timelines, and resource allocation may reduce implementation efficiency and hinder the timely achievement of Viksit UDAN’s objectives which was a major barrier in the old scheme.
The absence of real-time performance monitoring may delay the identification of underperforming routes and operational inefficiencies, limiting timely corrective actions and reducing the overall effectiveness and sustainability of Viksit UDAN.
Viksit UDAN lacks a uniform green airport framework across its infrastructure projects. The absence of mandatory sustainability standards for new airports and helipads may increase future carbon emissions, energy consumption, and operational costs.

Way forward

Strengthening inter-agency coordination through a dedicated coordination mechanism such as a separate wing under the aegis of Ministry of civil aviation involving a single-window clearance system, regular review meetings, shared digital platforms, and clearly defined responsibilities can ensure timely decision-making and reduce delays.
A real-time data-driven monitoring framework should be established to track route performance, passenger demand, operational efficiency, and financial sustainability. It improves in early identification of underperforming routes and facilitates timely corrective actions such as route restructuring, improved scheduling, or targeted support.
Green airport standards should be integrated into Viksit UDAN through mandatory sustainability guidelines. Extending the principles of initiatives like CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) and promoting Sustainable Aviation Fuel (SAF) for regional aviation, along with renewable energy adoption and energy-efficient designs, can ensure environmentally sustainable growth.

References

Press Information Bureau. (2026, July 4). Prime Minister launches the Next Phase of UDAN – Viksit UDAN. Ministry of Civil Aviation, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2281051&reg=48&lang=1

Press Information Bureau. (2026, March 26). Cabinet Approves Modified UDAN to Deepen Regional Connectivity and Expand Inclusive Air Access Across India. Ministry of Civil Aviation, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2245471&reg=48&lang=2

Press Information Bureau. (2024, October 20). The Journey of UDAN: Soaring Towards Inclusivity in Indian Aviation. Ministry of Civil Aviation, Government of India. https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2066445&reg=48&lang=2

Lok Sabha. (2025, August 21). Regional air connectivity under UDAN (Unstarred Question No. 4671). Ministry of Civil Aviation, Government of India.

https://www.pib.gov.in/PressReleaseDetail.aspx?PRID=2245099&reg=46&lang=1

Business standard. What is Viksit UDAN? India’s new push for regional air connectivity. (2026, July 7). https://www.business-standard.com/industry/aviation/what-is-viksit-udan-india-s-new-push-for-regional-air-connectivity-126070900761_1.html

About the Contributor

Madhuritha D is a Research and Editorial Intern at IMPRI. She is currently pursuing her Master’s in Political Science at Madras Christian College, Chennai. Her internships across think tanks and research organisations involved contributing to strategic reports and policy research. Her academic interests include gender, international relations, and policy analysis.