UPSC Exam Preparation: Topic of the Day – UDAN Scheme
Ude Desh ka Aam Naagrik (UDAN) is a regional air connectivity scheme to provide connectivity to unserved and underserved airports across the country through revitalization of existing airports. The scheme ensures growth, development, affordability and connectivity. The primary objective of the scheme is to facilitate regional growth, give a boost to employment, and promote tourism by making flying affordable to masses. It extends Viability Gap Funding to the operators in order to encourage them to fly smaller aircraft to underserved airports with a commitment to fix the prices of the tickets at Rs.2500 for an hour long flight (at least for half of the seats).
The airlines in India, do not find it lucrative to operate from small cities. These concerns have been addressed by the government through this scheme by a combination of fare caps and subsidies. UDAN Scheme is an effort to make a common man’s dream of flying, a reality. It is a market-based intervention mechanism where the seat subsidies are bided for, by the airlines. Terminal navigation landing charges, parking and landing charges are exempt for Regional Connectivity Scheme (RCS) flights. Security and fire services will be provided free of cost. Besides, electricity, water and other utility services will be provided at concessional rates.
The scheme proposes a complete win-win situation for both the airlines as well as the target beneficiaries. It retains potential business profits to the airlines by limiting the category of seats belonging to the subsidized category at 50%, while the other 50% of the seats could be sold at market prices. Centre funds 80% of the subsidy amount to be contributed towards subsidies and the rest is contributed by the state. The principle of cooperative federalism is thus upheld.
There are significant multiplier effects of revitalizing underserved and unserved airports. Tourism would see a boost as Agra, Mysore, Shimla and other such tourist spots would be just a short distance away and could save one’s time. Investments in infrastructure and employment creation would be other significant benefits. This will lead to enhanced business activity, better infrastructure and expansion of trade & commerce.