The Union Cabinet has approved the launch and implementation of the Regional Connectivity Scheme – Modified UDAN with a total outlay of ₹28,840 crore. Covering FY 2026-27 to FY 2035-36, this 10-year scheme focuses on developing 100 new airports/airstrips, building 200 helipads, and providing Viability Gap Funding to boost regional air travel and regional economic growth.
Background:
- Original UDAN Scheme was launched in 2016 with the objective of making air travel affordable and strengthening connectivity to Tier-2 and Tier-3 cities.
- Over nine years of implementation:
- 663 routes have been operationalised across 95 airports, heliports and water aerodromes (as on 28 February 2026).
- More than 3.41 lakh flights have been operated, carrying 162.47 lakh passengers.
- Connectivity has been established in remote, hilly and island regions, boosting tourism, healthcare access and emergency services
- Fostered growth in regional airlines and diverse fleet operations, laying a strong foundation for the Modified UDAN Scheme.
About RCS – Modified UDAN
- Duration: 10 years from FY 2026-27 to FY 2035-36
- Total outlay: Rs.28,840 crore with the budgetary support of the Government of India.
Components
- Development of Aerodromes (CAPEX): 100 airports will be developed from existing unserved airstrips to enhance regional connectivity
- This is in line with the Viksit Bharat 2047 vision of infrastructure expansion and transforming India into a globally competitive aviation ecosystem
- Total outlay of Rs.12,159 crore over the next eight years.
- Operation & Maintenance (O&M) of Aerodromes: O&M support will be provided for 3 years capped at
- Rs 3.06 crore per annum per airport
- Rs 0.90 crore per annum per heliport/water aerodrome
- Estimated at Rs.2,577 crore for around 441 aerodromes.
- This will be provided due to high recurring O&M costs and limited revenue streams for Regional Connectivity Scheme (RCS)-only aerodromes, the Scheme
- Development of Modern Helipads: It proposes developing 200 modern helipads at Rs.15 crore each, amounting to a total requirement of Rs.3,661 crore over the next eight years (inflation-adjusted)
- Focused on priority and aspirational districts to improve last-mile connectivity and emergency response.
- It seeks to address connectivity challenges in hilly, remote, island and aspirational regions, the Scheme
- Viability Gap Funding (VGF): Under the RCS, airline operators receive financial support in the form of VGF for operating awarded routes.
- Recognising the need for longer market development, VGF support to airline operators is proposed amounting to Rs.10,043 crore over 10 years.
- Atmanirbhar Bharat Aircraft Acquisition: It proposes to procure two HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air.
- This will help 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,
Impact:
- Enhanced regional air connectivity to underserved and unserved areas.
- Boost to economic growth, trade and tourism in Tier-2 and Tier-3 cities.
- Support affordable air travel for common citizens.
- Improved emergency response and healthcare access in remote and hilly regions.
- Greater viability and sustainability for regional aerodromes and airline operators.
- Promotion of the indigenous aerospace sector under Atmanirbhar Bharat.
- Progress towards Viksit Bharat 2047 goal.