According to sources, the expanded scheme will prioritise helipads and smaller airports in hilly areas, aspirational districts and the North-East.
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The Union Cabinet is expected to consider a proposal this week to roll out a modified version of the UDAN scheme, with implementation likely from April 1, 2026, sources familiar with the development told businessline.
Accordingly, the revamped framework, if approved, would extend the regional air connectivity programme beyond its current term and mark the beginning of a new expansion phase.
The proposal — which has already been reviewed by the Expenditure Finance Committee (EFC) of the Ministry of Finance — envisages a total outlay of ₹30,000 crore, sources said.
As per the proposal under consideration, ₹18,000 crore has been earmarked for the development of new airports and related infrastructure, while ₹12,000 crore has been proposed as viability gap funding (VGF) to support airline operations on regional and remote routes.
UDAN framework
Under the existing UDAN framework, airlines receive VGF and other concessions from airport operators as well as support from Central and State governments to operate flights connecting unserved and underserved airports.
The plan to modify and extend UDAN was first announced in the Union Budget 2025-26 by Finance Minister Nirmala Sitharaman, who stated that the next phase would aim to connect 120 additional destinations and enable travel for nearly four crore passengers over the next decade.
According to sources, the expanded scheme will prioritise helipads and smaller airports in hilly areas, aspirational districts and the North-East. It is also expected to address bottlenecks that affected earlier rounds, including land acquisition delays, technical and regulatory constraints, aircraft availability, leasing challenges and maintenance support.
The scheme is likely to continue operating under a market-driven bidding model, wherein airlines assess passenger demand and propose routes during bidding rounds.
Launched in October 2016 under the National Civil Aviation Policy, UDAN was conceived to make air travel affordable and boost regional connectivity. The first flight under the scheme was flagged off in April 2017 between Shimla and Delhi by Prime Minister Narendra Modi.
According to recent official data, 649 routes have been operationalised out of 915 valid routes awarded, connecting 93 unserved and underserved airports, including 15 heliports and two water aerodromes.
The data showed that over ₹4,300 crore has been disbursed as VGF, while ₹4,638 crore has been invested in airport development under the scheme.
In total, more than 1.56 crore passengers have flown on over 3.23 lakh UDAN flights so far.
However, several sanctioned airports remain temporarily non-operational due to land constraints, technical issues, or lack of airline operators.
Published on March 1, 2026