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India has entered the next phase of its regional aviation expansion with the launch of Modified UDAN, a revamped connectivity programme backed by an investment of Rs 28,840 crore. The scheme aims to improve air connectivity, expand airport infrastructure, and bring affordable air travel to more underserved regions across Bharat.
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the Regional Connectivity Scheme, Modified UDAN, on March 25, 2026. The scheme was formally launched on July 4, 2026. It will run for ten years, from FY 2026-27 to FY 2035-36.
Union minister Ashwini Vaishnaw, briefing reporters after the Cabinet meeting, said the government will develop 100 airports from existing unserved airstrips. He clarified that the plan does not involve greenfield projects. Instead, existing aerodromes will be upgraded. He added that 200 helipads will also come up, with focus on hilly regions, the Northeast, island territories, and aspirational districts.
Nine years of the original UDAN scheme
The original Regional Connectivity Scheme, UDAN (Ude Desh ka Aam Nagrik), was launched in October 2016. Its goal was to make air travel affordable and connect Tier 2 and Tier 3 cities that lacked regular flights.
As of July 15, 2026, the scheme has operationalised 679 routes across 95 airports, heliports and water aerodromes. More than 3.58 lakh flights have operated under the scheme since its launch. These flights have carried over 1.68 crore passengers.
India’s civil aviation sector has expanded significantly during this period. The country now ranks as the third largest domestic aviation market in the world. The number of operational airports has more than doubled, rising from 74 in 2014 to 165 as of July 15, 2026.
The scheme’s impact has been felt in remote, hilly and island locations such as Tezpur, Pasighat, Diu, Pithoragarh and Rourkela. Travel time on several routes has fallen sharply. The Vijayawada to Kadapa route, which earlier took 8 to 10 hours by road, is now covered in about an hour by air.
Four components of Modified UDAN
Modified UDAN is built around four main components.
The largest allocation, Rs 12,159 crore over eight years, is set aside for developing 100 airports from unserved airstrips. Officials have linked this to the government’s Viksit Bharat 2047 vision for infrastructure expansion.
A second component addresses the high running costs faced by smaller aerodromes in their early years. The scheme allocates Rs 2,577 crore for Operation and Maintenance support. This support is capped at Rs 3.06 crore per year for each airport, and Rs 0.90 crore per year for each heliport or water aerodrome, for a period of three years. It is expected to cover around 441 aerodromes.
A third component funds the construction of 200 modern helipads. Each helipad is estimated to cost Rs 15 crore, taking the total outlay for this component to Rs 3,661 crore over eight years. These helipads are meant for regions where conventional airport infrastructure is not feasible, and where helicopter access can support healthcare and emergency response.
The fourth component is Viability Gap Funding for airlines operating regional routes. The scheme allocates Rs 10,043 crore over ten years for this purpose. Airlines will be eligible for support for up to five years. Funding will taper from the third year, and route exclusivity will be limited to three years.
Vaishnaw said the government will provide full VGF support for the first two years before the taper begins, based on lessons learnt from the earlier phase of the scheme.
Push for indigenous aircraft
Modified UDAN also includes an Atmanirbhar Bharat component. This addresses a shortage of small fixed wing aircraft and helicopters suited to remote and difficult terrain. The scheme proposes two HAL Dhruv helicopters for Pawan Hans and two HAL Dornier aircraft for Alliance Air.
A distinct funding model
Officials have highlighted the funding structure behind UDAN as unusual among large countries. Nations such as the United States, Canada, Brazil and Australia typically rely on public funding alone to sustain regional air connectivity.
India’s scheme draws on an additional source. Under the RCS levy mechanism, a small fee is charged on select categories of domestic flights. This, combined with government budgetary support and non-monetary concessions, helps lower operating costs for regional carriers.
New infrastructure on the ground
The scheme’s progress is visible in new airport infrastructure. The new terminal building at Jodhpur Airport was recently inaugurated. It spans 23,342 square metres and can handle 1,500 passengers at peak hour, and 20 lakh passengers annually. The terminal has 20 check in counters, six aerobridges, and modern baggage handling and security systems.
Passenger facilities under UDAN have also expanded. The scheme has introduced UDAN Yatri Cafes, which offer affordable food at airports. It has also introduced free Wi-Fi services and a Flybrary initiative, giving travellers free access to books while they wait.
With Modified UDAN now in place, the government aims to build on the gains of the original scheme. Officials say the goal is a modern, inclusive and sustainable civil aviation ecosystem that extends affordable air travel to every part of the country over the next decade.
