New Delhi. 11 August 2016. The Government of India has recently released National Civil Aviation Policy (NCAP) 2016 which envisages Regional Connectivity Scheme (RCS). The Scheme will inter-alia be implemented by way of Viability Gap Funding (VGF) for operators under RCS. VGF will be shared between Ministry of Civil Aviation and the State Government in the ratio of 80:20 and for the North-Eastern States the ratio will be 90:10.

The payment of the full amount of the VGF will be made to the airline operator from the Regional Connectivity Fund (RCF) and the State Governments will be subsequently asked reimbursement. The RCF will be funded by a levy from a date to be notified by the Government under Section 5(2) (ab) of the Aircraft Act 1935.