Ude Desh ka Aam Nagrik (UDAN) was launched as a regional connectivity scheme under the Ministry of Civil Aviation in 2017. It is an innovative scheme to develop the regional Aviation market with some key features. Its main goal is to make air travel affordable and extensive, to boost inclusive national economic development, job growth and air transport infrastructure development of all regions and states of India. The UDAN scheme aims at stimulating regional connectivity with flights covering distances up to 800 km through a market-based mechanism.
According to industry chamber FICCI, about 53 airports across the country have been streamlined to execute operations under the scheme. A dozen airports where limited but irregular flights operate will be connected. As many as 31 destinations that are not operational despite the existence of airports will become active. Furthermore there are many airports in Tier 2 and Tier 3 which remain empty which hardly receive one two flights in a week. It is worth noting that the air travel sector of the country has improved tremendously.
The scheme will be jointly funded by the central government and state governments. The scheme will run for 10 years and can be extended thereafter.
Features of UDAN Scheme
i) Improving air transport infrastructure in all parts of the country with a special focus on remote areas. ii) Ambitious plan of making 425 underserved airports operational in the country iii) Improving the economy of the country by facilitating faster connectivity for strengthening supply chain iv) Creating job opportunities in the aviation sector v) Making air services available at lower prices.
Components of UDAN Scheme
It has two components. The first one is to improve the existing airports and develop new ones for faster regional connectivity. The second one is the addition of new, topped airfare and financially viable regional real roots.
Funding for UDAN Scheme
Is done by Central Government; the government aims at giving subsidised air fares with help of Viability Gap Funding (VGF). Viability Gap Funding means a grant to support projects that are economically justified but not financially viable. Such a grant under VGF is provided as a capital subsidy to attract the private sector players to participate in PPP projects that are otherwise financially unviable.
Under the UDAN scheme concessions are given on ticket-related taxes. UDAN also allows flight code sharing which is a marketing arrangement in which an airline places its designator code on a flight operated by another airline, and sells tickets for that flight. Airlines throughout the world continue to form code-share arrangements to strengthen or expand their market presence and competitive ability
The State Governments reduce the GST to 1%. They help in improving fuelling infrastructure by coordinating with oil companies. Provide free security personnel and land for airport development. They also assist in supplying water, electricity, etc at cheap rates.
Airport Operators
Airport operators provide on-airport roadways, automobile parking facilities, rental car availability, passenger pick-up and drop-off locations, and various truck facilities to accommodate cargo and mail movements. For UDAN flights the operators will not charge for parking, landing, storage, etc. They will not charge nil terminal navigation landing charge. They will give 4% discount on UDAN-RCS flight’s Route Navigation and Facilitation Charge (RNFC).
UDAN scheme has evolved in four rounds. The 4th round of UDAN was launched in December 2019 with a special focus on North-Eastern Regions, Hilly States, and Islands. The airports that had already been developed by Airports Authority of India (AAI) are given higher priority for the award of VGF (Viability Gap Funding) under the Scheme. Under UDAN 4, the operation of helicopters and seaplanes are also been incorporated. Air India and SpiceJet have the biggest fleet of regional planes under this scheme. Jet Airways too flies on regional routes but did not participate in the first UDAN round.
UDAN has facilitated regional air connectivity by making it affordable for the common man in India. And, slowly the scheme is helping the nation in creating entrepreneurial climate and many jobs.
