UDAN Scheme Budget Unchanged at Rs 550 Crore for 2026-27 Amid Declining VGF

• The UDAN scheme receives an allocation of Rs 550 crore in the Union Budget 2026-27, nearly identical to the Rs 540 crore in 2025-26.
• The revised estimate for 2025-26 is Rs 434.5 crore, significantly lower than the actual disbursement of Rs 789.3 crore in 2024-25, indicating a 30% decline.
• Government's viability gap funding (VGF) for airlines has been consistently declining since FY24, dropping from Rs 807 crore to an expected Rs 447 crore in FY26.
• As of January 20, 2026, 93 airports (73 unserved, 20 underserved), including heliports and water aerodromes, have been operationalized under UDAN, serving over 1.6 crore passengers.
• 15 airports, including Pathankot, Kushinagar, and Shimla, are currently non-operational under UDAN due to various issues like concession period completion and low passenger loads.

Why It Matters: UDAN scheme budget remains stable, but VGF and operational airports face declines, prompting a modified scheme.