The Union Cabinet on Wednesday approved a revamped UDAN scheme with a total outlay of Rs 28,840 crore, establishing an ambitious plan to expand regional air connectivity over the next decade.
The modified UDAN 2.0 scheme will be implemented from 2026-27 to 2035-36. The programme aims to develop 100 airports by upgrading existing unserved airstrips, supported by a capital outlay of Rs 12,159 crore over the next eight years.
The plan also addresses last-mile connectivity challenges, particularly in hilly, remote, island, and aspirational regions. This includes the development of 200 modern helipads at a cost of Rs 15 crore each.
The total allocation for this component stands at Rs 3,661 crore over eight years, with the objective of improving access to emergency services and healthcare in difficult terrains.
The Cabinet has also approved the procurement of indigenous aircraft to address the shortage of small aircraft needed for operations in remote areas. This includes two HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air.
To support route expansion and ensure commercial viability in less-served markets, airlines operating on regional routes will continue to receive viability gap funding (VGF). A total of Rs 10,043 crore has been earmarked for this purpose over the next ten years.
To ensure long-term sustainability, the scheme provides for operation and maintenance (O&M) support for regional airports, which often face high recurring costs and limited revenue.
Financial assistance will be extended for three years, capped at Rs 3.06 crore annually per airport and Rs 90 lakh per helipad and water aerodrome. The total estimated outlay for this support is Rs 2,577 crore, covering approximately 441 aerodromes.
In line with the government's push for the “Make in India” initiative, the scheme includes Rs 400 crore in budgetary support for the acquisition of indigenously manufactured aircraft. The government expects the scheme to boost connectivity to underserved regions, particularly Tier-2 and Tier-3 cities, while making air travel more affordable and improving emergency response capabilities in remote areas.
The original UDAN scheme, launched in 2016, has operationalised 663 routes across 95 airports, heliports, and water aerodromes as of February 2026. More than 3.41 lakh flights have been operated under the programme, carrying over 1.62 crore passengers. These efforts have significantly improved connectivity to remote regions and supported the growth of regional airlines across the country.
