UPSC Prelims Practice Questions — Wings of Change

Q1. With reference to Viability Gap Funding (VGF) under the Regional Connectivity Scheme (UDAN), consider the following statements: Which of the statements given above is/are correct?

  1. It bridges the gap between the cost of operating a route and the revenue that route can earn at affordable fares.
  2. It is paid to airport operators to finance construction works on unserved airstrips.
  3. It is a one-time capital grant released before the first flight, after which the route receives no further support.
  • A. 2 and 3 only
  • B. 1 and 2 only
  • C. 1, 2 and 3
  • D. 1 only

Q2. With reference to the design of the Regional Connectivity Scheme (UDAN), consider the following statements: Which of the statements given above are correct?

  1. Support under the scheme is tied to specific routes that connect unserved or underserved airports.
  2. Airlines that receive support accept caps on airfares on the supported routes.
  3. Concessions under the scheme come only from the Union Government, and State Governments have no financial role in it.
  4. The scheme expects airlines to run supported routes at a loss as a public-service obligation.
  • A. 2 and 4 only
  • B. 1 and 2 only
  • C. 1, 2 and 3 only
  • D. 1, 3 and 4 only

Q3. Under the Regional Connectivity Scheme, an airline selected for a route is given exclusivity on it for a limited period. What is the main economic rationale for this?

  • A. To exempt the selected airline from safety oversight by the aviation regulator for that period
  • B. To let the selected airline raise fares on the route to market levels whenever it chooses
  • C. To keep thin early traffic from being split among rival operators before the route matures
  • D. To let the government recover the subsidy from the airline once the exclusivity period ends

Q4. UDAN's viability gap funding is backed by a Regional Connectivity Fund, which is financed by a levy charged per flight on certain domestic flights. In this context, consider the following statements: Which of the statements given above is/are correct?

  1. Because the fund is financed by an earmarked levy, its collections do not depend on the volume of air traffic.
  2. Shortfalls in the fund's collections can delay VGF disbursements to airlines operating supported routes.
  3. Because the levy is charged per flight, it tends to raise the operating cost of the levied flights and can be passed on to their passengers as higher fares.
  • A. 2 and 3 only
  • B. 1 only
  • C. 1 and 2 only
  • D. 1, 2 and 3

Q5. Modified UDAN combines Centre–State/UT MoUs with a Challenge Mode Portal for aerodrome development. In this context, consider the following statements: Which of the statements given above is/are correct?

  1. MoUs under which the Centre and a State both commit resources and responsibilities for aerodrome development are an instance of cooperative federalism.
  2. Allocating central support among States through a fixed formula based on population and area is what makes the challenge mode an instance of competitive federalism.
  3. Under a challenge-mode process, States' proposals compete with each other, and support goes to those judged better rather than being spread automatically across all States.
  • A. 1 only
  • B. 1 and 3 only
  • C. 1, 2 and 3
  • D. 2 and 3 only

Q6. With reference to air freight of farm produce under Krishi UDAN, consider the following statements: Which of the statements given above is/are correct?

  1. Air freight is best suited to low-value bulk commodities such as foodgrains, because large volumes spread its cost.
  2. Faster movement of perishables to distant markets can reduce post-harvest losses for farmers in remote regions.
  3. The benefits of Krishi UDAN are confined to farm produce from the North-Eastern States.
  • A. 2 and 3 only
  • B. 1 and 2 only
  • C. 2 only
  • D. 1 and 3 only

Q7. Consider the following assertion: Modified UDAN marks a shift in emphasis from demand-side to supply-side intervention in regional aviation. Which of the statements given above support/supports the assertion?

  1. It earmarks capital expenditure to develop airports from unserved airstrips.
  2. It funds the construction of modern helipads for areas with difficult terrain.
  3. It funds the procurement of Indian-built aircraft for public-sector regional operators.
  4. It caps airfares on supported routes to keep air travel affordable for passengers.
  • A. 1, 2 and 3 only
  • B. 3 and 4 only
  • C. 1, 2, 3 and 4
  • D. 1 and 2 only