February 1, 2025: The finance minister Nirmala Sitharaman, during the presentation on the Union Budget 2025-26, announced that the government would launch a modified UDAN (Ude Desh ka Aam Naagrik) scheme to connect 120 destinations. Through this scheme, the government aims to significantly boost regional air connectivity in India and facilitate carrying four passengers in the next 10 years. Further, the finance minister said that the scheme will also support helipads and smaller airports in hilly, aspirational and northeast region districts.
What is the UDAN Scheme?
The Ude Desh ka Aam Naagrik scheme, also known as the UDAN scheme, is a programme launched by the central government in October 2016 as a key component of its National Civil Aviation Policy. Under the scheme, Prime Minister Narendra Modi flagged the first flight from Shimla to Delhi in 2017.
During the Budget 2025 announcement, the finance minister shared that the government has enabled 1.5 crore middle-class people to fulfil their aspirations for speedier travel through the UDAN scheme. It has connected 88 airports and operationalised 619 routes.
The scheme has benefited 147.53 lakh passengers with 2.93 lakh flights, per official data by the Ministry of Civil Aviation until December 31, 2024.
UDAN scheme phases
The RCS – UDAN (Regional Connectivity Scheme – Ude Desh ka Aam Naagrik scheme) was conceptualised by the Ministry of Civil Aviation to promote regional air connectivity by making flying affordable for the common people. The government has introduced the UDAN scheme in various phases – UDAN 1, UDAN 2, UDAN 3, UDAN 4 and UDAN 5.
As per reports, the UDAN 5.0 series (5.0 to 5.4) involved major advancements, entailing removing distance caps, prioritising operational airports, boosting helicopter and small aircraft connectivity and reactivating discontinued routes, ensuring last-mile air connectivity and affordability across India.
Benefits of the UDAN Scheme
Through the UDAN scheme, the government aims to operationalise new routes and add new airports, including the introduction of water aerodromes and heliports. It also aims to achieve the following objectives:
Facilitate air travel for the common people: The focus is also on making air travel affordable for the people. The UDAN scheme will enable enhanced connectivity between cities through air routes.
Generate employment in the sector: The scheme will help generate employment opportunities in the airline industry, including airport operations, aircraft maintenance, air traffic control, and technical staff.
Boost tourism in cities: With the UDAN scheme, the government aims to promote tourism around key tourist spots across India.
Benefit small businesses in smaller cities in India: The scheme will benefit small businesses in smaller towns through increased economic activities and employment opportunities.
UDAN scheme and impact on real estate
The development of any infrastructure project drives economic activities in the region, creating increased job opportunities. Businesses and investors get drawn to the region for new avenues, steering the development of commercial spaces, including offices, warehouses, retail outlets, etc. As more and more people move to the area in search of jobs, it creates an increased demand for housing. All these factors directly impact the real estate sector, driving the demand for commercial and residential properties and leading to price appreciation. Hence, the initiatives undertaken by the government under the UDAN scheme will push the development of airport projects, thus serving as a key growth driver for the real estate sector.
Shekhar.G. Patel, managing director & CEO, Ganesh Housing Corporation Limited, said, “The 2025 Union Budget marks a watershed moment for India’s real estate landscape. The government’s strategic focus on affordable housing and commercial infrastructure development is particularly noteworthy. The expansion of GCCs into tier-two cities isn’t just a business decision – it’s reshaping our urban landscape. We’re witnessing unprecedented demand for Grade A office spaces in cities that weren’t on our radar five years ago. Additionally, the Udaan scheme’s focus on regional air connectivity is a game-changer for real estate markets in emerging cities.”
Shounak Gadre, Partner at Bain & Company, said, “The outlay of ~₹1.5 lakh crore; 50-year interest-free loans to support states for capital expenditure; the Maritime Development Fund with a corpus of ₹25,000 crore; and investments in UDAN to increase connectivity will spur growth for EPC and infrastructure players who participate in nation-building.”
Housing.com News Viewpoint
The UDAN scheme launched by the government is expected to transform the domestic aviation industry in India. It aims to boost air connectivity across cities by increasing air routes catering to the growing number of air travellers, especially in smaller cities. It also aims to make air travel affordable for the common people.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
