On February 1, 2025, Finance Minister Nirmala Sitharaman announced the expansion of the modified UDAN (Ude Desh ka Aam Naagrik) scheme during the presentation of Union Budget 2025. This new iteration aims to connect 120 new destinations across India, significantly enhancing regional connectivity and enabling approximately four crore additional passengers to travel over the next decade.
During her budget speech, Sitharaman emphasized the government’s commitment to improving accessibility to underserved areas, particularly smaller airports and helipads located in hilly, aspirational, and northeastern districts. "The scheme will also support helipads and smaller airports in hilly, aspirational, and Northeast regional districts," she stated, indicating the government's focus on promoting aviation accessibility to regions with limited transport options.
The modified UDAN scheme builds upon its predecessor, which was first launched on April 27, 2017, and has already facilitated connectivity to 88 airports and operationalized 619 routes, with nearly 370 currently active. Sitharaman articulated the success of the original scheme, saying, "The scheme has connected 88 airports and operationalised 619 routes," thereby highlighting the growing demand for air travel to these less accessed areas.
Adding to the transformational aspect of the budget, Sitharaman noted the necessity for brownfield and greenfield airport projects, particularly emphasizing Bihar's future aviation needs. "Financial support will be provided for the Western Coast Sea Canal ERM project benefitting numerous farmers cultivating over 50,000 hectares of land," she remarked.
Rikant Pittie, CEO and Co-Founder of EaseMyTrip, lauded the plan, stating, "This will significantly improve regional connectivity, making travel more accessible and affordable for millions." This sentiment aligns with the broader vision of reinforcing tourism and economic growth through enhanced air travel accessibility.
Despite the ambitious expansion plans, the budget also highlighted some financial constraints as the allocation for the Ministry of Civil Aviation was reduced to Rs 2,357.14 crore for FY25, down from the Rs 2,922.12 crore allocation of the previous year. Commenting on this reduction, Vinay Dube, Founder and CEO of Akasa Air, said, "The Union Budget 2025 marks a significant step in supporting the sustained growth of India’s aviation sector. We commend the government’s commitment to infrastructure, which will make air travel more accessible, thereby boosting tourism and the economy on the whole."
While the UDAN scheme has started recovering its financial viability, with Rs 4,500 crore out of the Rs 5,500 crore utilized, the budget did not specify any fresh funding for the initiative. This leaves stakeholders within the aviation sector pondering the impact this might have on the scheme's longevity. The government has, as part of the UDAN initiative, also placed emphasis on subsidizing airlines to provide discounted fares for travelers, setting the fare at Rs 2,500 for one-hour flights under the scheme.
Simran Singh Tiwana, CEO of Star Air, noted the potential for even greater efficiency within the air travel framework, stating, "We offer a flight from Pune to Kishangarh, where there is demand to visit Ajmer Sharif; this route by train takes 36 hours, whereas by flight it only takes 1.5 hours." His comments shed light on the true necessity for such services, especially to regions with restricted infrastructure.
Under current economic conditions, the modified UDAN scheme not only emphasizes the immediate goal of enhancing passenger traffic but also engages with wider objectives, including fostering developmental growth within regional economies. By supporting key infrastructure initiatives, the government aims to tap new markets and facilitate the economic upliftment of remote districts. With this budget announcement, the aviation sector finds itself at a crossroads, balancing the demands of expansion with the realities of budget constraints as stakeholders anticipate how these developments will shape the future of air travel across India.