UDAN 2

The civil aviation ministry has relaxed the norms for its flagship regional flying scheme called UDAN (Ude Desh Ka Aam Nagrik) to allow for greater connectivity.
The relaxations include dilution of the exclusivity clause mandating that only one airline may fly on one route in the initial years. The norms that restricted two airports in close proximity from participating in the bidding has also been relaxed.

About UDAN:

• The UDAN scheme is applicable on flights which cover between 200 km and 800 km with no lower limit set for hilly, remote, islands and regions which are security sensitive.
• Under the UDAN scheme, the flights are bound to connect at least one RCS airport (underserved and unserved airports).
• The RCS caps fares and also offers a ceiling for the VGF(Viability Gap Funding) available for each route. Which means the airlines cannot charge beyond the caps specified from passengers.
• For the shortest route under the scheme fare has been capped at Rs 1,420. For longest route, fare has been capped ar Rs 3,500.
• The Centre has also decided to provide concessions such as 2% excise on Value Added Tax (VAT) and service tax at 1/10th.
• State government are bound to provide free security and fire service, utilities at concessional rates and reduce VAT on ATF to 1%.
• There will be no landing charges, parking charges and Terminal Navigation Landing Charges will be imposed for RCS flights.
• A Regional Connectivity Fund (RCF) will be created to fund the scheme via a levy on certain flights. States are expected to contribute 20 per cent to the fund.

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