The Udan scheme, designed to boost regional air connectivity in India, is set to receive ₹502 crore in the FY25 budget, signaling a decrease from the revised estimate of ₹850 crore in FY24 and the initial estimate of ₹1,244 crore. The allocated funds will play a crucial role in reviving 22 airports, initiating 124 air routes, and providing viability gap funding for enhancing connectivity in the north-eastern region.
The FY25 budget for the civil aviation ministry reflects an allocation of ₹2300 crore, representing a reduction from the revised estimate of ₹2922.12 crore for FY24 and the initial estimate of ₹3113.36 crore. While the overall budget has seen a decrease, the focus on Udan signifies the government’s ongoing commitment to fostering regional air connectivity and promoting the growth of the aviation sector.
A significant portion of the budget, amounting to ₹1158.79 crore, has been earmarked for Air India Asset Holding Ltd (AIAHL), a special purpose vehicle holding various assets previously owned by Air India during its government ownership. This allocation is intended for servicing the loan transferred to AIAHL as part of Air India’s financial restructuring. The FY24 budget had initially proposed ₹1144.49 crore for AIAHL, which was later revised to ₹713.92 crore.
In FY24, the government had outlined plans to revive an additional 50 airports, heliports, water aerodromes, and advanced landing grounds under Udan, aiming to enhance regional connectivity. The FY25 budget reflects a continuation of this commitment, with the allocation of ₹1,000 crore sanctioned for three years, starting from April 2023 until March 2026. This funding will support the revival and development of unserved and underserved airports, helipads, water aerodromes, and advanced landing grounds, among other critical infrastructure.
The government has identified 33 airports, heliports, and other landing grounds for tentative revival and development under the third phase of Udan. In July, ₹410 crore was sanctioned for the development of 15 aerodromes, with plans to identify additional heliports and water aerodromes through ongoing and future rounds of bidding under the Udan framework.
The reduced budget allocation for Udan in FY25 raises questions about the potential impact on the pace and scale of regional air connectivity initiatives. However, the government’s commitment to allocating funds for the development of critical aviation infrastructure indicates a continued focus on fostering connectivity, especially in underserved regions.
While the budget for Udan in FY25 has witnessed a reduction, the overall budgetary allocation for the civil aviation ministry underscores the government’s dedication to advancing regional air connectivity. The coming years will reveal the effectiveness of these budgetary measures in achieving the objectives of Udan and furthering the growth of India’s aviation industry.
