The Government of India has launched the Modified UDAN scheme with a ₹28,840 crore allocation, aiming to transform regional aviation over the next decade by developing 100 aerodromes, 200 helipads, and supporting indigenous aircraft procurement.

This initiative is expected to boost connectivity, tourism, and economic growth in Tier‑2 and Tier‑3 cities while strengthening domestic aerospace manufacturing.

The Modified UDAN scheme spans from FY 2026‑27 to FY 2035‑36 with a total budgetary outlay of ₹28,840 crore. It is designed to enhance regional air connectivity, particularly in underserved and unserved areas, while supporting affordable air travel for citizens.

The scheme also aligns with the government’s long‑term vision of Viksit Bharat 2047, positioning aviation as a driver of inclusive growth and national integration.

A major component of the scheme is the development of 100 aerodromes, converted from unserved airstrips, with a capital expenditure allocation of ₹12,159 crore. This infrastructure expansion is expected to create a robust aviation ecosystem, enabling smaller towns and remote regions to access air services.

To ensure sustainability, the government has earmarked ₹2,577 crore for operations and maintenance support, covering approximately 441 aerodromes, with capped annual assistance per airport and heliport.

The scheme also proposes the construction of 200 modern helipads at a cost of ₹3,661 crore, strategically located in hilly, remote, island, and aspirational districts. These helipads will improve last‑mile connectivity, emergency response, and healthcare access in difficult terrains, thereby integrating aviation into broader social and developmental goals.

Viability Gap Funding (VGF) remains a critical element, with ₹10,043 crore allocated to support airline operators over ten years. This financial backing will help airlines sustain operations on low‑traffic routes until passenger demand stabilises, ensuring that regional connectivity does not collapse under commercial pressures.

A distinctive feature of this phase is the emphasis on indigenous aircraft acquisition. The scheme includes procurement of HAL Dhruv helicopters for Pawan Hans and HAL Dornier aircraft for Alliance Air.

This strengthens domestic manufacturing capabilities under the Atmanirbhar Bharat initiative, while addressing logistical challenges in geographically difficult areas. It also creates long‑term demand for local aerospace manufacturing and maintenance services, benefitting companies such as Hindustan Aeronautics Limited.

The inauguration of the new terminal building at Jodhpur Airport, completed at a cost of ₹480 crore, symbolises the scheme’s infrastructure ambitions.

Spanning 23,000 square metres, the terminal can handle 20 lakh passengers annually and incorporates modern amenities, energy‑efficient systems, and sustainable design features inspired by Rajasthan’s royal heritage. This facility is expected to boost tourism, trade, and employment in the region.

From a business perspective, the scheme presents opportunities and challenges. Infrastructure firms engaged in airport construction may see a steady pipeline of projects, while regional airlines must balance government support with operational efficiency. Historical data from earlier UDAN phases suggests that sustainability will depend on consistent passenger demand and the ability of operators to manage costs effectively.

For investors, key monitorables include the pace of tender awards for the 100 aerodromes, utilisation rates of commissioned airports, and order inflows for indigenous aircraft. The profitability of regional airlines and the execution capabilities of construction firms will be decisive factors in determining the scheme’s success.

Agencies