The five airlines, three will have to apply to the Directorate General of civil Aviation (DGCA) for Airline Operator Permit under scheduled commuter category.
Alliance Air and Spice Jet do not have to apply for any such permit and can start regional flights right away.
The government aims to enhance grass root adoption of aviation as a transportation medium and offers carriers cash subsidies for selling up to 40 seats per aircraft at ₹ 2,500 for each hour of flight.
This will give a huge fillip to investments, tourism and job creation in the interiors of India.
The seating capacity of airlines under the scheme will range from 19 to 78.
The scheme also provides for various benefits for the airline operators including no airport charges and three-year exclusivity on the routes.
The regional airlines will connect these destinations
About UDAN Scheme
Aimed at bringing air travel within reach of the common man, Central Government has launched the UDAN scheme
Offers subsidy to airlines for flying to domestic airports with limited connectivity.
Fare cap of ₹ 2,500 per hour of flying by plane and ₹ 5,000 for helicopters.
State governments and airport operators will contribute to the scheme.
First flight under this scheme to take off in Jan 2017
50% seats of the UDAN flights to have a fare cap of ₹ 2,500 and the rest will have market-based pricing
Applicable on flights of 200 km to 800 km distance
Hilly, remote, island and security sensitive regions have no distance limit
Centre will provide concessions on VAT and service tax to the airlines
No landing charges, parking charges and Terminal Navigation Landing Charges
A Regional Connectivity Fund will be created to fund the scheme