UDAN 2.0 – Reviving Regional Connectivity in India

January 7, 2025

The Indian civil aviation sector is poised for expansion with the anticipated introduction of the UDAN (Ude Desh ka Aam Naagrik) 2.0 scheme. Union Finance Minister Nirmala Sitharaman is expected to allocate funds for this initiative in the upcoming Union Budget. This new iteration aims to enhance last-mile connectivity by developing cost-effective airport infrastructure. The previous budget allocated ₹502 crore for the UDAN scheme, which was lower than previous estimates. Industry insiders suggest that the allocation for UDAN 2.0 will be higher, supporting the goal of increasing operational airports to 350-400 by 2047.

Objectives of UDAN 2.0

UDAN 2.0 aims to stimulate the regional aviation market. It seeks to provide affordable air travel to underserved and unserved areas. The scheme focuses on reviving existing airports and airstrips to facilitate connectivity. It also intends to ease operational regulations for new airlines and operators.

Financial Framework

The financial framework includes support from the Central and state governments. Viability Gap Funding (VGF) will incentivise airlines to operate in underserved regions. The scheme aims to keep airfares affordable for passengers. This financial backing is crucial for the sustainability of operations at smaller airports.

Operational Progress

Since its inception in 2016, UDAN has operationalised over 85 aerodromes, including airports, heliports, and water aerodromes. The scheme has facilitated over 1.44 crore passengers across more than 2.8 lakh flights. It has also successfully operationalised 601 routes, including helicopter routes. The number of operational airports has increased from 74 in 2014 to over 157 in 2024.

Cost Reduction Strategies

UDAN 2.0 proposes to reduce the operational costs of small regional airports. Estimates indicate that running costs can range from ₹7 to ₹10 crore annually. The scheme will explore ways to lessen these expenses while maintaining service quality. This includes easing entry barriers for new airlines and operators, which is critical for encouraging competition.

Future Aspirations

The long-term vision for UDAN 2.0 includes developing over 100 underutilised airstrips. The initiative aims to enhance regional connectivity across India. By 2047, the government envisions a robust network of operational airports catering to diverse regions. This expansion will help meet the growing demand for air travel in smaller towns and cities.

UDAN stands for “Ude Desh ka Aam Naagrik,” meaning “Let the common citizen fly.”
The scheme has facilitated travel for over 1.44 crore passengers since its launch.
Viability Gap Funding (VGF) is a financial incentive to encourage airlines in underserved areas.
The number of operational airports in India has doubled from 74 in 2014 to 157 in 2024.
ALGs refer to Advance Landing Grounds, essential for regional connectivity.

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