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    Question

    Consider the following statements regarding the UDAN

    Scheme: 1.This is a regional connectivity initiative by the Government of India, where airlines are required to cap airfares for 50% of the total seats at Rs 2,500 for a one-hour flight. 2.The government compensates in the form of Viability Gap Funding (VGF) to airlines for losses due to low fares. Which of the statements given above is/are correct?
    A 1 only Correct Answer Incorrect Answer
    B 2 only Correct Answer Incorrect Answer
    C Both 1 and 2 Correct Answer Incorrect Answer
    D None of the above Correct Answer Incorrect Answer

    Solution

    UDAN Scheme: ▪UDAN (Ude Desh ka Aam Nagrik) Scheme is a regional airport development and connectivity enhancement program launched by the Ministry of Civil Aviation as part of the National Civil Aviation Policy 2016, applicable for 10 years. ▪Phase 1 was launched in 2017, with the objective of connecting underserved and unserved airports in the country. oPhase 2 was launched in 2018, with the aim of expanding air connectivity to more remote and inaccessible parts of the country. oPhase 3 was launched in November 2018, with the focus on enhancing air connectivity to hilly and remote regions of the country. oPhase 4 of the UDAN scheme was launched in December 2019, with a focus on connecting islands and other remote areas of the country.   ▪Under the scheme, airlines have to cap airfares for 50% of the total seats at Rs. 2,500 per hour of flight. Hence, statement 1 is correct.   ▪This is achieved through financial stimulus and Viability Gap Funding (VGF) from the government, with the Regional Connectivity Fund (RCF) created to meet the VGF requirements. Hence, statement 2 is correct.

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