About the scheme

• In 2017, the Ministry of Civil Aviation launched the Regional Connectivity Scheme (RCS) “UDAN” (Ude Desh Ka Aam Naagrik) which aims at providing connectivity to un-served and under-served airports of the country through revival of existing air-strips and airports to make flying affordable to the common man who want to travel to and fro the Tier 2 and Tier 3 cities of the country.
• UDAN has a unique market-based model. Airline routes are allocated to operators selected through a competitive bidding mechanism. 
• Under the scheme, nearly half of the seats in UDAN flights are offered at subsidised fares (Rs 2,500 for per hour flight) and the participating carriers are provided a certain amount of viability gap funding (VGF) – an amount shared between the Centre and the concerned states.
• The government said VGF will be reduced if passenger load factor remains high and will be discontinued after 3 years when the route becomes self sustainable.
• The scheme also offers waiver of certain statutory charges and taxes on jet fuel to companies in order to offer affordable connectivity.
• The airport that will be renovated under this scheme will be chosen after referring to the respective State government. Together with the State government the Central government will revive the dysfunctional and unserved airports of the country.
• The Airports Authority of India (AAI) is designated as the Implementing Agency under this Scheme.
• The scheme is now in its fourth phase with focus on bringing connectivity to priority areas like North East India, Jammu and Kashmir, Ladakh, hilly states in other parts of the country, and islands. Under UDAN 4, the operation of helicopters and seaplanes have also been incorporated.

Why in News?

• The Ministry of Civil Aviation has said that so far, 425 UDAN routes have been operationalized across the country, connecting 68 UDAN airports including 2 water aerodromes & 8 heliports.

Reference:

1. https://pib.gov.in/PressReleasePage.aspx?PRID=1843407