Context
- Recently, scheduled commercial flight operations commenced from the captive airport at Mundra under the Regional Connectivity Scheme (RCS), connecting it to four domestic destinations to enhance affordable regional transit.
Structural Framework of UDAN
- Nodal Ministry: Administered by the Ministry of Civil Aviation under the National Civil Aviation Policy.
- Implementing Agency: Executed by the Airports Authority of India (AAI).
- Nature & Tenure: A Central Sector Scheme with an operational tenure of 10 years.
- Target Segments: Focuses on reviving unserved aerodromes (no commercial flights) and underserved aerodromes (less than one commercial flight daily).
Financial Mechanism & Incentives
- Seat Capping: Operators must reserve a minimum of 50% of aircraft capacity for subsidized, distance-capped fares.
- Viability Gap Funding (VGF): Provided to offset losses; shared between the Center and States in an 80:20 ratio (90:10 for North-Eastern states, hilly regions, and Union Territories).
- VGF Resource Mobilization: Financed through a standard levy imposed per flight on major, lucrative trunk routes.
- Fiscal Concessions: Central excise duty on Aviation Turbine Fuel (ATF) is capped at 2% at RCS airports; States lower VAT/GST on ATF to 1% or less for 10 years.
- Operational Exemptions: Complete waiver on landing, parking, and terminal navigation landing charges for participating airlines.
Phased Evolution
- UDAN 1.0 to 4.0: Progressed from initial route revival to incorporating helipads (2.0), seaplanes and tourism loops (3.0), and prioritizing island and North-Eastern territorial connectivity (4.0).
- UDAN 5.0 Core: Dismantled the previous 500 km stage-length cap and focused heavily on category-2 and category-3 aircraft.
- Krishi UDAN: Specialized cargo-centric iteration designed to optimize agricultural logistics for perishable goods from tribal, hilly, and North-Eastern districts.
Q. Consider the following statements regarding the Regional Connectivity Scheme (RCS) - UDAN:
1. It is a Centrally Sponsored Scheme where the Viability Gap Funding (VGF) is shared equally between the Central Government and all States in a 50:50 ratio.
2. Airline operators selected under the scheme must allocate at least 50% of the total aircraft seating capacity at capped, subsidized fares.
3. The NITI Aayog serves as the designated implementing agency responsible for route allocations and bidding.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
Solution
Correct Answer: (b)
• STATEMENT 1 INCORRECT: UDAN is a Central Sector Scheme. The VGF sharing pattern is split 80:20 for normal states and 90:10 for North-Eastern states, hilly states, and Union Territories.
• STATEMENT 2 CORRECT: Scheme mandates require selected operators to reserve a minimum of 50% of their seating capacity for subsidized regional connectivity flights.
• STATEMENT 3 INCORRECT: The Airports Authority of India (AAI) is the designated implementing agency for the scheme, not the NITI Aayog.