UDAN full form is ‘Ude Desh ka Aam Nagarik.’ It is a regional connectivity project that connects rural areas of the country by plane at a reduced rate. UDAN 4.0 has 78 new routes for low-cost flights. The regional connectivity programme will apply to routes with lengths ranging from 200 to 800 kilometres. No lower limit is imposed for hilly, isolated, island, or security-sensitive areas. Allocations will be distributed fairly among five regions – North, West, South, East, and North East – with a cap of 25% for balanced regional growth.

In the present article, we shall see the features and significance of the Ude Desh Ka Aam Nagrik scheme, which will be helpful in your UPSC Exam.

What is the UDAN Scheme?

UDAN, also known as Ude Desh Ka Aam Nagrik, is a scheme to make air travel more affordable for the general public in India's tier II and III cities. The central government plans to provide a 2% excise on Value Added Tax (VAT) and service tax at one-tenth of the rate. Additionally, liberal code sharing will be allowed for airports participating in the regional connectivity scheme. A Regional Connectivity Fund (RCF) will be established to finance the scheme, funded through a tax on specific flights. The states are expected to contribute 20% to the fund. The government states that if the passenger load factor remains high, the Viability Gap Funding (VGF) will be reduced and eventually phased out after three years once the route becomes self-sustainable.

Objectives of the UDAN Scheme

• The Ude Desh Ka Aam Nagrik Scheme’s principal goal is to make air travel more affordable and widespread.
• The Scheme is part of the National Civil Aviation Policy (NCAP).
• The Government of India and state governments jointly support it.
• Travel to rural cities is also made very affordable by UDAN.

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Provisions of the UDAN Scheme

• Benefited Airports: The UDAN project aims to connect un-served and under-served airports by revitalizing existing airstrips and airports. 
• Implementing Agency: The implementation of the project is entrusted to the Airports Authority of India (AAI).
• Phases of the Bidding: The bidding process for route awards will be completed in three distinct phases by the end of 2018.
• Applicable Route Length: The scheme applies to routes ranging from 200 to 800 kilometres, with no lower restriction for hilly, rural, island, or security-sensitive areas.
• Creation of a Fund: A Regional Connectivity Fund (RCF) will finance the scheme by taxing certain flights.
• Flight Cost: Flights travelling approximately 500 kilometres per hour will cost Rs. 2,500. Helicopter operations will also be permitted for the first time, with rates of Rs. 2,500 for a 30-minute flight.
• Equal Allocation: Allocations will be distributed equally among five regions - North, West, South, East, and North East - with a 25% cap to ensure balanced regional growth. 
• Incentives: The initiative incentivises airlines to launch additional flights to underserved smaller cities and villages, making these operations economically viable. 
• Invested Amount: The AAI plans to invest Rs. 17,500 crore in upgrading airport infrastructure by 2019-20.
• Number of UDAN 'Seats and Departures': Helicopter operations will have a minimum of 5 and a maximum of 13 seats per flight. 

Check out the article on Indian national airways Here!

Salient features of the UDAN Scheme

The duration of the scheme is set to 10 years. Participating airlines in UDAN are chosen through a competitive bidding process.

The Central government offers the following support

• Subsidy to cover Value Gap funding (VGF) for airlines participating in the scheme.
• Concessional GST on tickets booked using the scheme.
• Codesharing opportunities for flights under the policy.

State Governments extend the following measures

• GST reduction to 1% for 10 years.
• Coordination with oil companies to facilitate refuelling facilities.
• Provision of land for airport and ancillary development.
• Trained security personnel.
• Utilities at subsidized rates.
• 20% of VGF.

Airport operators, such as AAI, provide the following concessions

• No parking, landing, or storage charges at participating airports.
• Nil TNLC (Terminal Navigation Landing Charges).
• Ground handling by the airline selected through the bidding process.
• Discounted RNCF (Route Navigation and Facilitation Charges) to 42.4% of normal rates by the Airports Authority of India.

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Various Phases of the UDAN Scheme

• UDAN 1.0: During this Phase, 5 airlines were given 128 flight routes to 70 airports, including 36 newly made operational airports.
• UDAN 2.0: The Ministry of Civil Aviation identified 73 underserved and unserved airports in 2018. Helipads were also connected for the first time as part of phase 2 of the UDAN scheme.
• UDAN 3.0: Tourism Routes are included in UDAN 3 in collaboration with the Ministry of Tourism. Seaplanes will be included to connect water aerodromes. Adding several routes in the Northeast Region to the UDAN network.
• UDAN 4.0: To improve connectivity to remote and regional areas of the country, 78 new routes were approved under the 4th phase of the Regional Connectivity Scheme (RCS) – Ude Desh Ka Aam Nagrik(UDAN) in 2020.
• UDAN 4.1: UDAN 4.1 is primarily concerned with connecting smaller airports and specific helicopter and seaplane connections. Sagarmala Seaplane Services is a large-scale project run by the Ministry of Ports, Shipping, and Waterways in collaboration with potential airline operators.
• UDAN 5.1: The government launched UDAN 5.1 to improve connectivity in remote India using helicopters.

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Achievements of the UDAN Scheme

According to data released in August 2022 by the Ministry of Civil Aviation:

• The UDAN scheme has successfully enhanced air connectivity to Tier-2 and Tier-3 cities, offering affordable airfares and revolutionizing travel.
• The number of operational airports has increased from 74 in 2014 to 141.
• Under the UDAN scheme, 68 underserved/unserved destinations, including 58 airports, 8 heliports, and 2 water aerodromes, have been connected.
• With 425 new routes, UDAN has facilitated air connectivity to over 29 states and union territories.
• More than one crore passengers have benefited from this scheme, availing its advantages.

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The Significance of UDAN

• The Ude Desh Ka Aam Nagrik(UDAN) Scheme allows passengers to fly to and from remote airports such as Hubballi and Baldota in Karnataka, Burnpur in West Bengal, Darbhanga in Bihar, Hissar in Haryana, and others.
• The UDAN initiative helps India’s aviation business by allowing small and first-time operators to participate in the rapid development of passenger traffic.
• Airlines must compete for exclusive rights to fly on the regional routes opened up by the scheme.
• Robust regional connection is also expected to help the economy of the rural locations that make it into the country’s new aviation map.
• While the plan aims to address the issue of phantom airports, it also provides cost savings on travel.
• The scheme encourages airlines to launch new routes to underserved smaller cities and towns by giving Viability Gap Funding to make these operations economical.

Also, read the article on the Airports Authority of India here.

Challenges of the UDAN Scheme

• The poor financial health of many smaller regional carriers has hampered the scheme.
• The routes were awarded under UDAN, but that doesn’t mean they’re viable or even remotely functional.
• Many players only have one or two planes, which should be addressed more frequently. New planes need to be within reach for these smaller players.
• The failure of UDAN is largely because it is a market-driven scheme, which requires the government to make the routes far more profitable for airline operators. 
• Bids under UDAN are submitted based on the airline operator’s demand assessment for that specific route or route.
• New planes need to be within reach for these smaller players. Smaller airlines must compete with larger airlines for pilots and other personnel, who must be paid on par with major carriers in the market, even though our slice of the pie is much smaller.

UDAN(Regional Connectivity Scheme For UPSC Exam) : Download PDF Here!

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