Question

Read the below statements marked as Assertion (A) and Reason (R). Mark the correct options: Assertion (A): UDAN Scheme improves regional air connectivity. Reason (R): It provides financial viability gap funding to airlines.

• A. Both A and R are true, and R is the correct explanation of A
• B. Both A and R are true, but R is not the correct explanation of A
• C. A is true, but R is false
• D. A is false, but R is true

Answer 1

Answer:

A. Both A and R are true, and R is the correct explanation of A

UDAN Scheme: Enhancing Regional Air Connectivity

• Assertion (A): UDAN Scheme improves regional air connectivity. This statement is true. The UDAN (Ude Desh Ka Aam Nagrik) scheme, launched by the Ministry of Civil Aviation, Government of India, aims to connect unserved and underserved airports across the country, thereby enhancing regional air connectivity.
• Reason (R): It provides financial viability gap funding to airlines. This statement is also true. UDAN achieves its objective by providing financial support in the form of Viability Gap Funding (VGF) to airlines willing to operate flights on regional routes.
• Relationship between A and R: The VGF provided under UDAN makes it financially viable for airlines to operate on less profitable regional routes. This incentive encourages airlines to expand their network to smaller towns and cities, directly contributing to improved regional air connectivity. Therefore, Reason (R) correctly explains Assertion (A).
• Key Features of UDAN:
  • Objective: To make air travel affordable and accessible for the common citizen.
  • Target Routes: Focuses on routes connecting Tier-II and Tier-III cities.
  • Subsidy Mechanism: Airlines receive VGF for a specified period to cover the difference between the cost of operations and the subsidized ticket prices.
  • Passenger Fare Cap: A ceiling is set on the passenger fare for certain flights to ensure affordability.
  • Awards Routes: Routes are awarded to airlines through a competitive bidding process.
• Significance: The scheme plays a crucial role in promoting balanced regional development, boosting tourism, and creating employment opportunities in remote areas.