GUWAHATI: Union Finance Minister Nirmala Sitharaman, while presenting her eighth consecutive Union Budget on Saturday, February 1, announced a revamped version of the Regional Connectivity Scheme (RCS) — UDAN (“Ude Desh ka Aam Nagrik”) — with plans to add 120 new destinations. The remodelled scheme aims to facilitate travel for four crore passengers over the next decade, with a special focus on supporting helipads and smaller airports in hilly, aspirational districts, and the North East region.
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Alongside the UDAN revamp, the Finance Minister also unveiled the creation of a Maritime Development Fund with a corpus of ₹25,000 crore, with the government contributing up to 49%, while the remaining will come from ports and private sector investments.
However, despite the bold announcements, the UDAN scheme’s performance in the northeastern states paints a more turbulent picture, raising questions about its long-term sustainability.
Launched in 2016, UDAN was designed to improve air connectivity in underserved and unserved regions, particularly in the Northeast. The early phases of the scheme were marked by notable achievements:
- Increased Connectivity: Several airports were activated, and new routes connected remote areas to major cities.
- Passenger Growth: The public initially responded positively, with a surge in passenger numbers on newly introduced routes.
However, the momentum has not been sustained. A source from the Airports Authority of India (AAI) revealed, “At present, there are 16 operational airports and around 30-40 routes. However, non-RCS services are also present,” indicating a reduction in active UDAN routes compared to initial projections.
Despite the government’s push, the scheme faces several hurdles:
- Decline in Operational Routes: The official UDAN website lists 22 airports in the Northeast, but only 16 are currently operational, signalling underutilisation of infrastructure.
- Passenger Traffic Decline: Nationally, UDAN passenger traffic dipped by 22%, falling to 1.8 million as of November 2022 compared to the same period the previous year.
- Financial Viability Issues: The Comptroller and Auditor General's (CAG) 2023 report highlighted that up to UDAN-3, 52% of awarded routes never commenced operations. Moreover, only 30% of routes that did start managed to complete the full three-year concession period.
An AAI official explained, “Those companies which have completed the three-year tenure usually discontinue as the profit margin is minimal based on the destination and passenger count. However, there are a few who continue on their own investment.”
In response to these challenges, the government has already implemented a few measures:
- Route Rationalisation: Efforts are underway to revive and operationalise previously cancelled routes to optimise resources.
- Financial Support: The provision of Viability Gap Funding (VGF) is being strengthened to make regional routes more attractive for airlines.
While the revamped UDAN scheme aims to breathe new life into regional air connectivity, especially in challenging terrains like the Northeast, its success will hinge on addressing fundamental issues such as financial viability, operational hurdles, and infrastructure limitations.
Only time will tell if the government’s renewed focus will help UDAN truly take off—or if it will continue to face turbulence on its journey towards regional connectivity.
