Regional Connectivity Scheme (RCS)-UDAN, Objectives and Components

Context: The Union government will seek an extension for the Regional Air Connectivity Scheme (RCS) beyond the initial 10-year period.

Regional Connectivity Scheme (RCS)-UDAN

• UDAN (Ude Desh ka Aam Naagrik) is a regional airport development and “Regional Connectivity Scheme” (RCS) under the Civil Aviation Ministry of the Union Government.
• Its objective is to connect small and medium cities with big cities through air service.
• India is the world’s third-largest market in the aviation sector.
• The scheme provides connectivity to the country’s unserved and under-served airports by reviving existing air-strips and airports.
• The scheme is jointly funded by the central government and state governments.
• Under the scheme, airlines have to cap airfares for 50% of the total seats at Rs. 2,500 per hour of flight. This is achieved through;
  • Viability Gap Funding (VGF) – A government grant provided to the airlines to bridge the gap between the cost of operations and expected revenue.
  • Regional Connectivity Fund (RCF) was created to meet the viability gap funding requirements under the scheme.

Key Objectives of RCS-UDAN

• Affordable Airfare: The scheme aims to make air travel affordable for the common man by capping airfares on specific routes. A certain number of seats on every flight are sold at a subsidized fare, making it accessible to a larger population.
• Enhance Connectivity: It focuses on connecting under-served and unserved airports to key cities, ensuring that smaller towns and regions have better access to air travel, thus integrating them into the national economic mainstream.
• Boost Economic Growth: By improving connectivity, the scheme intends to spur economic growth in remote regions by facilitating easier movement of people and goods, boosting tourism, and creating jobs.
• Development of Infrastructure: The scheme encourages the development of airports and airstrips in remote and rural areas, many of which had been neglected or were non-operational.

Two Components of UDAN

• Airports: The first component is to develop new airports and enhance the existing regional airports to increase the number of operational airports for scheduled civilian flights.
• Flight routes: The second component is to add several hundreds of new financially viable, capped-airfare, and new regional flight routes to connect more than 100 under-served and unserved airports in smaller towns by using “Viability Gap Funding” (VGF) where needed.

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