Discuss the main features and significance of the Udan scheme ?
Ans -Discuss the main features and significance of the Udan scheme ? -UDAN (‘Ude Desh ka Aam Naagrik’) is a first-of-its-kind scheme globally to stimulate regional connectivity through a market-based mechanism.
Need for schemes like Udan:
- There are as many as 398 “unserved” airports which have no commercial flights and 18 “under-served” airports host less than seven flights per week.
- Besides, a major reason for the poor regional air connectivity in India is that airlines do not find it lucrative to operate from small cities. The government has tried to address this concern by an adroit combination of subsidies and fare caps.
Key features of the UDAN scheme:
Pros of the scheme
- It could lead to development of smaller cities as faster air connectivity will attract infrastructure & investment
- It could ease passenger pressure from Railways & Roads.
- It may provide major boost to Tourism industry in India
- Smaller Airlines could successfully compete with bigger airlines.
- Moreover, of the 35 Crore middle class citizens, only 8 Crore people fly. Capping of fares,
enhancing connectivity will lead to an increase in the number of citizens who can fly and can
take some burden off railways
- It will give impetus to India’s ambition of becoming third largest aviation market by 2020.
Challenges/issues in implementing this scheme
- Administration of Viability Gap Funding (VGF) would require scrutiny of airlines balance sheet which would be a messy process. It has the potential of becoming another hotbed for controversy
- VGF would result in additional subsidy burden at a time when economic survey argued in favour of removing subsidies for the rich.
- Subsidy based regime would be impacted by the vagaries of price changes in oil prices
- Capping of fares (1200 for half hour, 2500 for an hour) is criticised as airlines argue that it should be a function of demand/supply.
- Significantly, the success of Regional Connectivity Scheme (RCS) depends on the state lowering tax rates and providing security at airports. Each state has to agree to this – and it may not be as simple as the centre has envisioned it to be.
- Airports in many Tier 2 and Tier 3 cities do not have big runways, so they can’t take regular aircraft. That means airlines will need to induct smaller aircraft for short take-offs and landings.
- Such aircraft needs specialised crew. India produces 200 to 300 pilots every year, and it’s safe
to say that training specialised crew will take time.
- There are 476 airstrips in the country out of which 90 are in usable state, among which 76 are operational currently. It can be challenging to develop so many ports in the span of 10
- Analysts say even as the intent of the policy is good and the efforts laudable, its success will depend on proper implementation and traffic demand/load factors.
- It’ll be a while before the results are visible, and its success can be measured. Needless to say, if the scheme is successful, it will have a positive impact on travel- and hospitality-related sectors.
- Domestic air-travel demand could get a fillip, which will be positive for the aviation sector from a long-term
- Developing regional routes is expected to eventually feed into major routes, and that augurs well for the sector