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Compensatory Afforestation

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Compensatory Afforestation (CA) refers to afforestation and regeneration activities carried out as a way of compensating for forest land diverted to non-forest purposes. Here "non-forest purpose" means the breaking up or clearing of any forest land or a portion thereof for-

but does not include any work relating or ancillary to conservation, development and management of forests and wildlife, namely, the establishment of check-posts, fire lines, wireless communications and construction of fencing, bridges and culverts, dams, waterholes, trench marks, boundary marks, pipelines or other like purposes.

CA is one of the most important conditions stipulated by the Central Government while approving proposals for de-reservation or diversion of forest land for non-forest use. The compensatory afforestation is an additional plantation activity and not a diversion of part of the annual plantation programme.

Elements of Schemes for Compensatory Afforestation
The scheme for compensatory afforestation should contain the following details:-

Existing Legal Provisions
As per the Forest (Conservation) Act 1980, and the Rules and Guidelines made thereunder, whenever a forest land is to be diverted for non-forestry purposes, the equivalent non forest land has to be identified for compensatory afforestation and funds for raising compensatory afforestation are to be imposed. (For certain activities additional conditions are imposed. For eg. in case of conversion for mining purposes, additional conditions like maintaining a safety zone area, fencing and regeneration etc. are stipulated and for major and medium irrigation projects, catchment area treatment plans are suggested.) Any project proponent, government or private must apply for forest clearance from Ministry of Environment and Forests (MoEF), before the conversion of land take place. This proposal is to be submitted through the concerned forest department of the state government. The comprehensive proposal is to include the details of non-forest/ degraded forest area identified for compensatory afforestation including its area map, year wise phased forestry operations, details of species to be planted and a suitability certificate from afforestation/ management point of view, along with the cost structure of various operations. If clearance is given, then compensation for the lost forest land is also to be decided by the ministry and the regulators.

Identification of Compensatory non-forest land for afforestation
As per the Forest (Conservation) Act 1980 and the Rules and Guidelines thereunder, the non-forest land for Compensatory Afforestation (CA) are to be identified contiguous to or in the proximity of Reserved Forest or Protected Forest, as far as possible. In case, non-forest land for CA is not available in the same district, non-forest land for CA is to be identified anywhere else in the State/Union Territory. If non forest land is unavailable in the entire State/ UT, funds for raising CA in double the area in extent of the forest land diverted need to be provided by the user agency. The non-availability of suitable non-forest land for CA in the State / Union Territory would be accepted by the Central Government only on the Certificate of the Chief Secretary to the State/Union Territory Government to that effect. However, in case of central government/ central undertaking projects, extraction of minor mineral from the river beds above 500 hectare, construction of link road, small water works, minor irrigation works, laying of transmission line upto 220 KVA etc, CA fund is to be raised on degraded forest land twice the forest area being diverted, without insisting for the certificate of Chief Secretary regarding non-availability of non-forest land.

The CA funds are to be used towards the development, maintenance and protection of forest and wildlife management. The funds for CA are to be recovered from the user agencies on the basis of the rates fixed by the State Forest Department which are site specific and varies according to the species, type of forest and site. The money received for Compensatory Afforestation is to be used as per site specific schemes submitted by the State along with the approved proposals for diversion of forest land. After receipt of the money, State Forest Department is to accomplish the afforestation for which money is deposited in the Compensatory Afforestation Fund within a period of one year or two growing seasons.

To compensate for the loss of tangible as well as intangible benefits from the forest lands which has been diverted for non forest use, the net present value of the land is to be recovered from the user agencies to adequately compensate for the loss of natural forests. Such funds were to be used for natural assisted regeneration, forest management and protection, infrastructure development, wildlife protection and management, supply of wood and other forest produce saving devices and other allied activities. For instance, in order to provide clean cooking and lighting benefits to rural and tribal population living in forest fringes and protected areas, the Ministry of New & Renewable Energy (MNRE) has taken up the programme for intensive distribution of Renewable Energy Devices like, Unnat Chulhas, Solar Cookers, Solar Lamps, Solar home lighting Systems etc. A cumulative of not less than 70% of funds utilized/earmarked under the Net Present Value (NPV) component are to be used for these activities, in areas covering national parks, Sanctuaries and reserve forests.

Issues in implementation
Between 1980 and May 2004 about 9.21 lakh hectare of forest land had been diverted for non forestry uses[1] and forest land aggregating up to 2.19 lakh hectare had been diverted after the formation of Ad-hoc Compensatory Afforestation Fund Management and Planning Authority (CAMPA) till March 2015[2].
However, much of the money collected for CA remained idle as the states and the Centre disagreed over the utilisation of such amount. Further, many states failed to collect the CA funds from the user agencies. Appropriation of such funds for CA also involved delay. Given such discrepancies in the implementation of compensatory afforestation, some NGOs had approached the Hon’ble Supreme Court for relief.
The Supreme Court in its order dated 3 April 2000, fixed the responsibility of ensuring the proper carrying out of compensatory afforestation on Ministry of Environment and Forests and said that it was for the Ministry to monitor the conditions stipulated at the time of grant of forest clearance.

The Supreme Court of India in October 2002 directed the creation of a ‘Compensatory Afforestation Fund’ in which all the monies received from the user agencies towards compensatory afforestation, additional compensatory afforestation, penal compensatory afforestation (means afforestation work to be undertaken over and above the prescribed compensatory afforestation under the Forest (Conservation) Act, 1980, in lieu of the extent of area over which nonforestry activities have been carried out without obtaining prior approval of the competent authority under the Forest (Conservation) Act, 1980) net present value (NPV) of forest land, Catchment Area Treatment Plan Funds, etc. were to be deposited.

Compensatory Afforestation Fund Management and Planning Authority (CAMPA) was thus notified by the Ministry of Environment and Forests, in exercise of powers conferred under Section 3 (3) of the Environment (Protection) Act, 1986, on 23 April 2004 at the behest of Supreme Court. The Supreme Court of India constituted Ad-hoc-CAMPA on 5 May 2006 since CAMPA could not be established with the proper legal backing by then.

Further, the Hon’ble Supreme Court on 10th July 2009 issued orders that Compensatory Afforestation Fund Management and Planning Authority (CAMPA) will have a National Advisory Council under the chairmanship of the Union Minister of Environment & Forests for monitoring, technical assistance and evaluation of compensatory afforestation activities.

The details of forests land converted and the compensatory projects undertaken are given on the website of CAMPA.

The 2015 bill on Compensatory Afforestation
A bill was passed by Lok Sabha in 2008 for providing a proper institutional mechanism for compensatory afforestation matters, but lapsed due to dissolution of Lok Sabha. Meanwhile, the Ad-hoc CAMPA used to carry out the CA related matters. The accumulated unspent amounts available with the ad hoc Compensatory Afforestation Fund Management and Planning Authority (CAMPA), as on April 2015, are of the order of Rs. 38,000 crore. The fresh accrual of compensatory levies and interest on accumulated unspent balance, are of the order of approximately Rs. 6,000 crore per annum [3].

To accelerate the CA activities, the Union Cabinet on 29 April 2015 gave its approval for introduction of the Compensatory Afforestation Fund Bill, 2015 in Parliament. The proposed legislation seeks to provide an appropriate institutional mechanism, both at the Centre and in each State and Union Territory, to ensure expeditious utilization, in an efficient and transparent manner, of the amounts realised in lieu of forest land diverted for non-forest purpose. It also seeks to provide safety, security and, transparency in utilization of these amounts, which currently are being kept in Nationalised Banks and are being managed by an ad-hoc body. These amounts would be brought within broader focus of both Parliament and State Legislatures and in greater public view, by transferring them to non-lapsable interest bearing funds, to be created under public accounts of the Union of India and each State. 

The Bill provides for among other things:- 

Expenditure of the National CAMPA is proposed to be met from the funds to be retained in the National Compensatory Afforestation Fund (CAF) from the accumulated funds transferred to it by the ad-hoc CAMPA, and the funds to be transferred, on yearly basis, to the National CAF from a part of the funds credited by user agencies directly into State CAFs. 

On 13 May, 2015 Lok Sabha referred the Bill to the Department-related Parliamentary Standing Committee on Science & Technology, Environment & Forests. On 26 February, 2016 the Committee submitted its report to the Parliament, containing 26 recommendations. The Central Government accepted 20 recommendations and moved 49 official amendments in the Bill -Compensatory Afforestation Bill, 2016 - on 21 April 2016. Lok Sabha passed the bill in May 2016 and Rajya Sabha on 28 July 2016.

In most of the States, funds received from the user-agencies were deposited in consolidated fund as revenue receipts which were made available to the Forest Department through budgetary provisions. The Comptroller and Auditor General of India (CAG) in his D.O. letter dated March, 4, 2013 had requested the then Finance Minister to examine the entire issue of maintaining a fund outside Government Accounting System. The CAG suggested to move the Supreme Court for review of its decision with regard to Ad-hoc CAMPA fund so that it can be transferred into Public Account of India. In compliance of the suggestions of the CAG, and in exercise of powers conferred under section 3 (3) of the Environment (Protection) Act, 1986, the Ministry of Environment and Forest (MoEF) formulated a draft CAMPA Order, 2014 for establishment of separate funds under public accounts of Union of India and each State and constitution of authorities at Union of India and each State for management of these funds and placed the same before the Supreme Court for approval. The approval of the Supreme Court to the draft Order is still awaited. However, the Bill passed by the Parliament provides for annual audit of the accounts by the CAG.

The passing of the Bill has ended the long era of ad-hocism and will help the Centre and State Governments to utilise these amounts in a planned manner. Government estimates that it will facilitate make available more than Rs. 6,000 crores per annum to the States/UTs for conservation, protection, improvement and expansion of forest and wildlife resources of the country. The Bill provides for transfer of 90 % of the accumulated amounts, which as on July 2016 is of the order of Rs. 40,000 crorers (excluding about Rs. 2000 crorers of interest already accrued on amounts presently being kept as Fixed Deposits.) to the States. All fresh amounts to be realised by the States in lieu of forest land to be diverted for non-forest purpose will be deposited directly into the funds to be created under public account of the respective State.The remaining 10 % Amounts to be retained at the National level will be used for monitoring and evaluation of activities to be undertaken by the States/UTs and Central Government from these funds and to provide, research and technical support to the States so as to ensure that these amounts are used in the technically best possible manner.

Details of Amounts Available with the Ad-hoc CAMPA As on 31.03.2016 may be seen here.

Availability of these amounts will not only help the States/UTs and local communities to ensure better management of their forest resources but will also result in creation of more than 15 crores man-days of direct employment, as per the Government press release dated 28 July 2016. A major part of these amounts will be used to restock and improve quality of degraded forests, which constitutes more than 40 % of the total forest cover of the country. Rules to be framed by the Central Government in consultation with the States/ UTs will provides for use of native species in afforestation activities to be undertaken from these funds. Majority of the employment will be generated in tribal dominated and backward areas of the country. Apart from creation of direct employment, utilisation of these amounts will result in increased availability of timber and various other non-timber forest products, and will thus help in improvement of the overall living standards of the forest dependent communities.

Also See


  1. Audit Report on compensatory Afforestation (Report No. : 21 of 2013), Comptroller and Auditor General of India
  2. Handbook of Forest (Conservation) Act, 1980, Rules and Guidelines</p>

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