• Research & Analysis Services I Academic I Market & Industry I Government Policy I
Quick Read
India’s UDAN: Progress of Airport building

India’s UDAN: Progress of Airport building

During the COVID-19 pandemic when we were pushed to maintain distance, connectivity was expanding its way to reach people. One such scheme, UDAN was announced by Prime Minister Modi in the year 2016 with an exquisite tagline, ‘Ude Desh ka Aam Adami’. 

Air travel has always been considered a luxurious affair. However, by connecting airports with towns and cities, the Government of India is offering a choice of a facile journey to the people. India has emerged as one of the fastest-growing aviation markets in the world. The domestic traffic in India has more than doubled from around 61 million in 2013-14 to around 137 million in 2019-20, registering a growth of over 14 percent per annum. 

UDAN is a regional airport development program of the Government of India and part of the Regional Connectivity Scheme (RCS) for upgrading underserviced air routes. Regional connectivity not only marks its importance for consumers but also markets and businesses. 

Till the launching of UDAN in 2016, India had 74 airports with scheduled operations. But, in 4 years under UDAN, four rounds of bidding under RCS-UDAN have taken place and 153 RCS airports including 12 water aerodromes & 36 Helipads have been identified for RCS flight operations. 

Presently, we are witnessing UDAN 4.1 and till now, 395 routes have been connected under earlier UDAN 1.0, 2.0, 3.0, and 4.0. 

Number of Operationalised airports (as of December 2021)

Source: Economic Survey, 2021-22

If we see the growth in civil aviation in terms of the number of airports from 1980 to 2020, it is 94.63 percent. Similarly, the number of passengers has increased by 95 percent during the same time (calculated from table 1.29, statistical tables, Economic Survey 2021-22). 

As far as parameters adopted for identifying airports under the UDAN scheme are concerned, the civil aviation ministry has said that it is a market-driven scheme, under which interested airlines, based on the assessment of demand on particular routes, submit their proposals at the time of bidding. An airport included in the awarded routes of RCS – UDAN and requires upgradation or development for commencement of RCS operations is developed under the “revival of unserved and underserved airports” scheme.

Financially, the centre leads the scheme with the states. The state governments contribute to the scheme by reducing VAT on Aviation Turbine Fuel (ATF) at RCS Airports located within the state to 1 percent or less for 10 years; providing land, infrastructural requirements, and security services in return for the economic benefits they earn from the airport. There are different perspectives of the concerned governments regarding policies. This can be seen as a challenge and also, as an opportunity to improve the scheme. 

To achieve the target of starting 220 new airports announced by the civil aviation minister, Jyotiraditya Scindia requires cooperation on all fronts. With the PM Gati Shakti scheme, 16 new airports will be built in five states including Madhya Pradesh, Chhattisgarh, Uttar Pradesh, Rajasthan, and Maharashtra.

The Union Budget has allocated Rs. 10,667 crores for the civil aviation ministry for 2022-23. Out of the total allocation, Rs. 600.7 crores has been earmarked for the regional connectivity scheme UDAN.

Leave a Reply

Your email address will not be published.