UDAN: Government expects Rs 300 crore annually from levy on airlines

The government expects to collect around Rs 300 crore annually from the levy on airlines flying on major routes towards the regional air connectivity scheme. To partly raise money for viability gap funding requirement under the UDAN (Ude Desh ka Aam Naagrik) scheme, the civil aviation ministry has been collecting the levy since December 2016.

With increasing number of UDAN routes, the ministry is also preparing to deal with higher funding needs in the coming months. The response to UDAN flights has been very positive and many routes are having good occupancy. More routes are getting added under the UDAN scheme, which seeks to connect unserved and under-served airports as well as making flying more affordable.

To fund the ambitious regional connectivity scheme UDAN the civil aviation ministry is collecting a levy of Rs 5,000 per departure from airlines operating in major domestic routes, including Mumbai and Delhi. With at least half of the seats in UDAN flights offered at subsidised fares, the participating carriers will be provided a certain amount of Viability Gap Funding (VGF) an amount shared between the Centre and the states concerned.

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