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The Regional Connectivity Scheme (RCS) is an Indian government initiative aimed at improving regional airport connectivity by subsidizing airfares and upgrading airport infrastructure. The scheme, officially known as Ude Desh ka Aam Naagrik (UDAN), which translates to Let the Common Citizens of the Country Fly, was launched by Prime Minister Narendra Modi in 2017. It is a key component of India's National Civil Aviation Policy (NCAP), with the goal of making air travel more accessible and affordable for the masses, particularly in underserved regions. The RCS offers various concessions, such as reduced taxes and discounted route charges, to participating airlines and airports, with a focus on increasing the number of operational airports and flight routes.
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What You'll Learn
The UDAN Scheme is a key component of the National Civil Aviation Policy (NCAP)
The UDAN Scheme, or Ude Desh ka Aam Naagrik (Hindi for "Let the common citizens of the country fly"), is a key component of the National Civil Aviation Policy (NCAP) in India. It was launched by Prime Minister Narendra Modi on April 27, 2017, with the inaugural flights between Delhi and Shimla, and Kadapa-Hyderabad-Nanded. The scheme aims to make air travel more accessible and contribute to economic development in India by targeting the country's numerous unserved and underserved regional airports.
The UDAN Scheme is a part of the Regional Connectivity Scheme (RCS) and focuses on developing new airports and enhancing existing regional airports to increase the number of operational airports for scheduled civilian flights. The scheme will be jointly funded by the central government and state governments, with a viability gap funding (VGF) requirement of ₹200 crore (2 billion rupees) annually. To participate in the scheme, airport operators must agree to provide various concessions, including discounted rates for route navigation and facilitation charges.
The first phase of the RCS plans to connect 22 underserved airports in various states across India, including Andaman Nicobar, Assam, Gujarat, Uttar Pradesh, Punjab, and Rajasthan. These airports will offer flights at a subsidized rate of Rs 2,500 per hour of flight, with a cap of Rs 3,500 for a total distance of 800 km. The scheme will also include the operation of helicopters and seaplanes, with a focus on promoting short-haul routes.
The UDAN Scheme has faced some challenges and criticisms, including issues with infrastructure, the dominance of larger airlines, and slow implementation. However, it has also received bids from several airlines and has the potential to revolutionize air transport in India by increasing the number of potential landing sites. The scheme is planned to run for 10 years, with the possibility of extension thereafter, and is expected to significantly impact regional connectivity and accessibility in India.
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RCS airports and helipads
The Regional Connectivity Scheme (RCS) is a government-led initiative in India to improve regional airport connectivity by upgrading under-serviced air routes. The RCS scheme involves setting up Greenfield airports and upgrading Brownfield airports to increase the number of operational airports for scheduled civilian flights. The scheme aims to make air travel more accessible and affordable for the masses and contribute to economic development in India.
The RCS is a key component of the National Civil Aviation Policy (NCAP), launched by Prime Minister Narendra Modi in 2017, with a target of 1.3 million annual passenger seats across 100 regional airports by the end of the 2018-2019 financial year. The scheme will run for 10 years and can be extended thereafter. The central and state governments will jointly fund the scheme through a Regional Connectivity Fund (RCF), with states contributing 20% and the central government providing viability gap funding (VGF) to subsidize airfares.
RCS seats are offered at discounted rates, with the airfare per RCS seat not exceeding Rs. 3,500 and determined based on flight distance. Selected airlines must commit 50% of the seats on RCS flights, with a minimum of 9 RCS seats and a maximum of 40 RCS seats per fixed-wing flight, and 12 RCS seats per helicopter flight. The number of RCS flights per week must be between three and seven. RCS routes will cover distances ranging from 200 to 800 km, with no lower limit for hilly, remote, island, and security-sensitive regions.
The success of the RCS and its impact on regional connectivity will depend on traffic demand and cooperation from various stakeholders, including governments, local bodies, and airport operators. The scheme has been well-received, with several states signing Memorandums of Understanding to participate and integrate RCS with other government initiatives for balanced regional growth.
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Funding the scheme
The Regional Connectivity Scheme (RCS) is a joint initiative between the Indian central government and state governments. The scheme is part of the National Civil Aviation Policy (NCAP) and is aimed at making air travel more accessible and contributing to economic development in India.
The RCS will be funded by the central government, state governments, and airport operators. The central government will provide concessions, such as a 2% excise on Value Added Tax (VAT) and service tax at a reduced rate. A Regional Connectivity Fund (RCF) will also be created to fund the scheme, with states contributing 20% and the remaining 80% coming from a levy on certain flights.
The Indian government will provide Viability Gap Funding (VGF) to subsidize airfares and reduce the cost of air travel. The VGF will be discontinued after three years when the route becomes self-sustainable. In addition, the government will provide concessions on service tax on tickets and allow code-sharing of UDAN-RCS flights with other operators.
Participating state governments will also provide concessions, such as reducing VAT or GST to 1% or less for 10 years, coordinating with oil companies to create fueling infrastructure, providing free land for airport development, and providing free trained security.
Airport operators must agree to provide concessions to participate in the UDAN-RCS scheme. Route Navigation and Facilitation Charges (RNFC) will be applied to UDAN-RCS flights at a discounted rate. For fixed-wing aircraft, there is a cap on the maximum fare of ₹2,500 per hour of flight for 50% of the seats, with the remaining 50% priced at market rates.
The Airports Authority of India (AAI) has also invested in upgrading airport infrastructure, with a plan to connect 22 underserved airports to key airports.
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Impact of RCS on the aviation sector
The Regional Connectivity Scheme (RCS), also known as UDAN (Ude Desh ka Aam Nagrik), which translates to "Let the common citizens of the country fly", is a regional airport development program by the Government of India. It is a part of the National Civil Aviation Policy (NCAP) and aims to make air travel more accessible and affordable for the masses, promote tourism, increase employment opportunities, and contribute to balanced regional economic growth in India.
The impact of RCS on the aviation sector in India is expected to be significant, with the scheme addressing the underdeveloped regional market in a country that has one of the world's fastest-growing civil aviation industries. Firstly, RCS will improve regional connectivity by setting up Greenfield airports and upgrading existing Brownfield airports, with a focus on making air travel accessible and affordable for people in remote, hilly, island, and security-sensitive regions. This will enhance mobility and promote inclusive growth by connecting underserved areas with key airports, thereby boosting economic development in these regions.
Secondly, RCS will increase the number of operational airports and flight routes, providing incentives to start flights to remote destinations and underutilized airports. This will not only improve overall aviation infrastructure but also enhance competition, potentially leading to reduced airfares and increased flight options for passengers. RCS also introduces a market-based reverse bidding mechanism to determine the lowest Viability Gap Funding (VGF) required, encouraging efficiency and cost-effectiveness among airline operators.
Additionally, RCS will promote integrated development by coordinating with other government schemes such as Bharatmala (roadways) and Sagarmala (waterways). This multi-modal approach will improve overall connectivity within the country, providing seamless travel options and enhancing the overall aviation experience for passengers. RCS also offers various concessions to participating airport operators, including discounted Route Navigation and Facilitation Charges (RNFC) and reduced taxes, making it more attractive for stakeholders to collaborate and contribute to the scheme's success.
Overall, the RCS is a positive step towards improving regional connectivity and accessibility in the aviation sector in India. However, its success will depend on careful monitoring of implementation, traffic demand, and cooperation from various stakeholders, including governments, local bodies, and airport operators.
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UDAN 1.0, 2.0, 3.0, 4.0, and 4.1
UDAN, an acronym for Ude Desh ka Aam Nagrik, is a regional connectivity project that connects rural areas of India by plane at a reduced rate. It is a key component of Prime Minister Narendra Modi's National Civil Aviation Policy (NCAP), which was released by the Ministry of Civil Aviation (India) on 15 June 2016. The scheme will be jointly funded by the central government and state governments. The UDAN scheme has successfully enhanced air connectivity to Tier-2 and Tier-3 cities, offering affordable airfares and revolutionizing travel.
UDAN 1.0 saw 36 new airports commissioned, with 128 flight routes for 70 airports awarded to 5 airline companies.
In UDAN 2.0, a helipad was added for the first time. The Ministry of Civil Aviation declared 73 unserved and underserved airports in 2018.
UDAN 3.0 saw several changes, including tourist routes, seaplanes connecting water aerodromes, and routes under 'UDAN' in the North-East region. The ministry of tourism played a major role in this phase.
UDAN 4.0 saw the approval of 78 new routes in 2020, including connections to the Kavaratti, Agatti, and Minicoy islands of Lakshadweep. The regional connectivity programme will apply to routes with lengths ranging from 200 to 800 kilometres.
UDAN 4.1 focuses on connecting small airports, special helicopter, and seaplane routes under UDAN. The Ministry of Civil Aviation has come up with 392 routes under the UDAN scheme.
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Frequently asked questions
The Regional Connectivity Scheme (RCS) is a government-funded programme in India to improve regional airport connectivity by upgrading under-serviced air routes.
UDAN, meaning "flight" in Hindi, is a key component of the RCS. It was launched by Indian Prime Minister Narendra Modi in 2017 and is part of the National Civil Aviation Policy (NCAP).
The RCS aims to make air travel more accessible and affordable for the masses, as well as contribute to economic development in India.
