Consider the following statements about the UDAN Scheme Aims to stimulate regional connectivity in T...........

Geography and Environment (PCS) Resources

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Consider the following statements about the UDAN Scheme:

Aims to stimulate regional connectivity in TIER-2 and TIER-3 cities.
Viability Gap Funding (VGF) for losses incurred on these routes.
Quota of seats allocated to airlines.

Which of the above statements is/are correct?

1 and 3 only

1, 2 and3

1 only

1 and 2 only

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Explanation:

The UDAN scheme aims to stimulate regional connectivity with flights covering distances up to 800 km through a market-based mechanism.

The government is expected to compensate for the loss with a Viability Gap Funding (VGF) of about Rs. 3,000 per seat. The VGF will be used to bridge the gap between the cost of airline operations and expected revenue.

Therefore statement 1 and 2 are correct.

All such route proposals are offered for competitive bidding through a reverse bidding mechanism and the route would be awarded to the participant quoting the lowest VGF per Seat.

Therefore statement 3 is incorrect