PM Modi Launches Modified UDAN, Opens Jodhpur Terminal

A New Framework for Regional Connectivity

Prime Minister Narendra Modi formally launched the Modified UDAN scheme (Ude Desh ka Aam Nagrik) on July 4, 2026, marking a significant expansion of India's regional aviation infrastructure. Coinciding with the launch, the Prime Minister inaugurated a new terminal building at Jodhpur Airport (JDH), a facility constructed at a cost of ₹480 crore designed to handle 2 million passengers annually. The Prime Minister's official visit to Rajasthan and Gujarat confirms these developments as part of a broader push to integrate Tier-2 and Tier-3 cities into the national aviation map.

Financial Outlay and Structural Components

The Ministry of Civil Aviation (MoCA) has secured a total financial outlay of ₹28,840 crore for the Modified UDAN program, which will be distributed over a 10-year period from FY 2026-27 to FY 2035-36. According to the Press Information Bureau, the scheme allocates ₹12,159 crore specifically for capital expenditure to develop 100 new airports from currently unserved airstrips over the next eight years.

To ensure operational longevity, the initiative earmarks ₹10,000 crore for Viability Gap Funding (VGF) to subsidize airline operations on regional routes. Furthermore, the government has addressed the high recurring costs associated with regional aerodromes by providing Operations and Maintenance (O&M) support, capped at ₹3.06 crore annually per airport for a duration of three years.

Strategic Shift Toward Rotorcraft and Domestic Manufacturing

A notable element of the Modified UDAN scheme is the focus on last-mile connectivity in difficult terrains. The initiative allocates ₹3,661 crore to construct 200 modern helipads, each estimated to cost ₹15 crore. This strategic shift utilizes rotorcraft to connect hilly, island, and remote regions where traditional runway infrastructure is often unfeasible. Additionally, the policy actively supports domestic aerospace manufacturing by incentivizing the procurement of indigenous aircraft, such as the HAL (Hindustan Aeronautics Limited) Dhruv helicopter and HAL Dornier aircraft.

Sustainability and Operational Challenges

While the government emphasizes inclusive access, the initiative faces challenges regarding long-term route viability. Industry data cited by The Economic Times suggests that nearly 50% of the routes launched under previous iterations of the UDAN scheme were discontinued due to financial unviability and lack of sustained demand. The current O&M support structure is designed to mitigate these historical issues by providing a financial cushion during the initial years of operation for regional aerodromes.

What Comes Next: Infrastructure Milestones

The Ministry of Civil Aviation has set ambitious targets for the coming decade. The development and operationalization of 100 airports from existing unserved airstrips are expected to be completed by FY 2035-36. Concurrently, the construction of the 200 planned modern helipads in remote regions is projected to conclude by 2034. These milestones represent the core of the government's strategy to deepen regional connectivity and expand air access across the country.

Why Regional Connectivity Matters

For regional airport operators and domestic airlines, the Modified UDAN scheme provides a critical financial framework to sustain operations in underserved markets. By bridging the gap between operational costs and revenue, the scheme aims to create a more resilient regional aviation network. For the broader industry, this development signals a shift toward integrating domestic manufacturing with civil aviation policy, potentially transforming the economics of secondary-market flight operations in India.