UPSC Prelims Practice Questions — Cabinet approves revamped UDAN scheme with changes in subsidy

Q1. With reference to the Regional Connectivity Scheme – Modified UDAN (approved 2026), consider the following pairings of a financial component with its proposed outlay: 1. Viability Gap Funding support to airline operators — ₹10,043 crore 2. Development of airports from unserved airstrips — ₹12,159 crore 3. Development of modern helipads in hilly/remote regions — ₹3,661 crore 4. Total scheme outlay over ten years — ₹18,840 crore Which of the above are correctly identified?

  1. Viability Gap Funding support to airline operators — ₹10,043 crore
  2. Development of airports from unserved airstrips — ₹12,159 crore
  3. Development of modern helipads in hilly/remote regions — ₹3,661 crore
  4. Total scheme outlay over ten years — ₹18,840 crore
  • A. 1 and 4
  • B. 1, 2 and 3
  • C. 2 and 3 only
  • D. 1, 2, 3 and 4

Q2. Under the Regional Connectivity Scheme – Modified UDAN, the 'Viability Gap Funding (VGF)' extended to airline operators is best described as:

  • A. A subsidy paid to the operator to bridge the gap between its operating cost on an unserved/underserved route and the revenue earned at the capped airfares
  • B. An interest-free loan to airlines, recoverable once the regional route turns profitable
  • C. A direct equity stake taken by the Government of India in regional airline companies
  • D. A levy collected from passengers on profitable trunk routes and pooled to cross-subsidise regional flights

Q3. The Regional Connectivity Scheme – Modified UDAN, approved by the Union Cabinet in 2026, is implemented by which one of the following Union Ministries?

  • A. Ministry of Civil Aviation
  • B. Ministry of Road Transport and Highways
  • C. Ministry of Housing and Urban Affairs
  • D. Ministry of Ports, Shipping and Waterways

Q4. With reference to the Regional Connectivity Scheme – Modified UDAN (2026), consider the following statements about its features: 1. Development of around 100 airports from existing unserved airstrips. 2. Development of 200 modern helipads in hilly, remote, island and aspirational regions. 3. Extension of the per-route subsidy tenure from three years to five years. 4. Financing of route subsidies through a levy embedded in airfares on non-UDAN domestic routes. Which of the above is/are NOT correct?

  1. Development of around 100 airports from existing unserved airstrips.
  2. Development of 200 modern helipads in hilly, remote, island and aspirational regions.
  3. Extension of the per-route subsidy tenure from three years to five years.
  4. Financing of route subsidies through a levy embedded in airfares on non-UDAN domestic routes.
  • A. 1 and 2
  • B. 3 only
  • C. 2 and 4
  • D. 4 only

Q5. With reference to how the Modified UDAN (2026) differs from the original UDAN scheme, consider the following statements: 1. The per-route subsidy tenure has been extended from three years to five years. 2. The source of subsidy funding has shifted from a levy on airfares to direct budgetary support from the government exchequer. 3. The implementation period of the Modified UDAN has been reduced to eight years. Which of the statements given above is/are correct?

  1. The per-route subsidy tenure has been extended from three years to five years.
  2. The source of subsidy funding has shifted from a levy on airfares to direct budgetary support from the government exchequer.
  3. The implementation period of the Modified UDAN has been reduced to eight years.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3
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