To tap Indian civil aviation market's growth potential, the government on Saturday announced a modified regional air connectivity scheme UDAN (Ude Desh ka Aam Naagrik) to connect 120 new destinations, airport projects in Bihar and upgradation of infrastructure for air cargo in the Union Budget.
However, the allocation for the civil aviation ministry in the Budget 2025-26 has been cut by nearly 10 per cent to Rs 2,400 crore and the money set aside for the UDAN scheme has also been reduced by 32 per cent to Rs 540 crore.
In her Budget speech, Finance Minister Nirmala Sitharaman said UDAN has enabled 1.5 crore middle-class people to meet their aspirations for speedier travel.
"Inspired by that success, a modified UDAN scheme will be launched to enhance regional connectivity to 120 new destinations and carry 4 crore passengers in the next 10 years. The scheme will also support helipads and smaller airports in hilly, aspirational, and North East region districts," the minister said.
Civil Aviation Minister K Ram Mohan Naidu said the budget reinforces the government's commitment to enhancing regional connectivity with the idea of 'Ease of Travel'.
"UDAN is more than just a transportation initiative; it is about bringing aspirations and opportunities closer to people. Having already enabled 1.5 crore passengers to experience affordable air travel, our target is to extend this benefit to 4 crore more in the next decade," he said in a statement issued by the ministry.
The number of air passengers annually has surpassed 350 million. and over the past ten years, domestic air passenger traffic has been growing at an annual rate of 10-12 per cent while the number of airports has more than doubled to 159.
"We are committed to developing 50 more airports in the next 5 years," the ministry said.
UDAN, under which the government provides viability gap funding for airlines, has so far connected 88 airports and has helped operationalise 619 routes.
Under the scheme, the airfare for a one-hour journey by a 'fixed wing aircraft' or half an hour's journey by a helicopter for about 500 kilometres, has been fixed at Rs 2,500. Apart from viability gap funding to airlines, the Airports Authority of India (AAI) has waived the airport fee for UDAN flights.
Further, the state governments concerned provide security, electricity, and fire-fighting facilities free of cost.
Meanwhile, Sitharaman said greenfield will be facilitated in Bihar to meet the future needs of the state.
"These will be in addition to the expansion of the capacity of Patna airport and a brownfield airport at Bihta," she noted.
Bihar is set to go to polls later this year.
Sitharaman also said the government will facilitate upgradation of infrastructure and warehousing for air cargo including high value perishable horticulture produce.
"Cargo screening and customs protocols will be streamlined and made user friendly," she added.
India is one of the world's fastest growing civil aviation markets and air traffic demand is on the rise.
Poonam Verma Sengupta, Partner at JSA Advocates & Solicitors, said civil aviation has received an allocation of Rs 2,400 crores in the budget.
"It is nearly a 10 per cent cut, which is likely to impact the regional air connectivity scheme UDAN. The UDAN scheme has been extended for another 10 years to connect 120 new destinations and carry 4 crore passengers in the next decade," she said.
The government is also focusing on the upgradation of infrastructure and warehousing for air cargo, including high-value perishable horticulture produce, she said and added that cargo screening and customs protocols are to be streamlined.
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