IAS Gyan

Daily News Analysis


6th March, 2023 Environment

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Context: Unlike the two other commitments India has made — one related to improvement in emissions intensity and the other about the deployment of renewable energy — the forestry target is a relatively difficult one to achieve.


Present situation:

  • Forests are under stress due to the need for rapid industrial and infrastructure development, and accompanying urbanisation.
  • In the last 10 years, more than 1,611 square km of forest land, a little more than the area of Delhi, has been cleared for infrastructure or industrial projects. Nearly a third of this — 529 sq km — has been cleared in the last three years itself.
  • But government data also shows that total forest cover had increased by 1,540 square km in the two years between 2019 and 2021.
  • A number of tree plantation, afforestation and reforestation programmes are being implemented to increase India’s forest and tree cover.
  • These include the Green India Mission, national afforestation programme, and the tree plantation exercises along the highways and railways. Other flagship government programmes like the national rural employment guarantee scheme (MGNREGS) and Namami Gange also have significant afforestation components.

What is Compensatory Afforestation?

  • The showpiece effort for extending India’s forest cover has been its compensatory afforestation programme that seeks to ensure that forest lands getting ‘diverted’ for non-forest purposes, like industrial or infrastructure development, is mandatorily accompanied by afforestation effort on at least an equal area of land.
  • While the plantation exercise on new lands cannot be compared with the fully grown forests getting diverted, compensatory afforestation — made a legal requirement through the Compensatory Afforestation Fund Act of 2016 — does ensure that newer parcels of land are earmarked for developing them as forests.
  • The law also acknowledges the fact that newly afforested land cannot be expected to immediately start delivering the range of goods and services — timber, bamboo, fuelwood, carbon sequestration, soil conservation, water recharge, and seed dispersal — that the diverted forests were providing.
  • As a result, project developers are also asked to pay for the Net Present Value (NPV) of the forests being cleared, based on a calculation decided by an expert committee.
  • According to the recently revised calculations, companies have to pay NPV at rates ranging between Rs 9.5 lakh and Rs 16 lakh per hectare, depending on the quality of forests getting diverted.

Background of CAMPA:

  • The compensatory afforestation law came into being only in 2016, but the concept has existed since the 1980s, as an offshoot of the Forest Conservation Act of 1980, which made it mandatory for project developers to seek ‘clearance’ of the Environment Ministry for any diversion of forest land.
  • The practice got institutionalised through the Supreme Court orders and observations during the hearings of the famous Godavarman case in the 1990s and 2000s.
  • But due to other litigation, the money collected for compensatory afforestation before 2016 had remained largely unutilised. Serious work on compensatory afforestation has begun only after the 2016 Act.
  • With the initial experience of the States regarding under-utilisation of the money collected towards compensatory afforestation, Hon’ble Supreme Court of India ordered for establishment of Compensatory Afforestation Fund and Compensatory Afforestation Fund Management and Planning Authority (CAMPA) in 2001. 
  • In 2006, separate bank accounts were opened in which the compensatory levies were deposited and adhoc CAMPA was established for the management of Compensatory afforestation fund
  • In 2009, Hon’ble Supreme Court permitted release of Rs.1000 crore every year to States/UTs for compensatory afforestation and other activities. 
  • In 2014, Hon’ble Supreme Court permitted release of 10% of total deposit of states in the fund from interest accrued on the deposits.
  • This Act has provisioned that CAMPA funds shall be kept in interest bearing non-lapsable Public Account.
  • After detailed deliberations with CAG and Ministry of Finance and deliberations with other Stakeholders, the fund flow mechanism could be finalized and the CAF Rules were finally put in place in 2018.
  • After notification of CAF Rules, with approval of the Supreme Court on 28 Jan 2019, an amount of Rs.54,685 Crore from Ad-hoc CAMPA has been brought under the control of Government of India. So far 27 States/UTs have created accounts for receiving the Funds from Union Government and today funds to the tune of Rs.47,436 crore have been transferred to those States.

The Compensatory Afforestation Fund Act, 2016:

  • It establishes the National Compensatory Afforestation Fund under the Public Account of India, and a State Compensatory Afforestation Fund under the Public Account of each state.
  • These Funds will receive payments for: (i) compensatory afforestation, (ii) net present value of forest (NPV), and (iii) other project specific payments. 
  • The National Fund will receive 10% of these funds, and the State Funds will receive the remaining 90%.
  • These Funds will be primarily spent on afforestation to compensate for loss of forest cover, regeneration of forest ecosystem, wildlife protection and infrastructure development.
  • The Bill also establishes the National and State Compensatory Afforestation Fund Management and Planning Authorities to manage the National and State Funds.

Huge money for Compensatory Afforestation:

  • All the money is meant to be spent solely on increasing, or improving the quality of, forest cover in the country, or on works that help this objective.
  • The money is parked in special funds created for this purpose at the Central and state levels.
  • The money is first deposited in the Central fund, from where it gets disbursed to states where the projects are located.
  • Critics say compensatory afforestation had legitimised clearing of forests, and see it as an example of ‘greenwashing’.
  • The contrary view is that since the clearing of forests for one or the other purpose cannot be entirely eliminated, compensatory afforestation is a good mechanism for attempting to make up for these losses to some extent.
  • More than Rs 66,000 crore has been realised in the Central fund through different levies prescribed in that law. A substantial part of this — nearly Rs 55,000 crore — has already been sent to the state governments. But much of this money remains locked in state government funds.
  • Government records show that annual plans of operations by the state governments have not made full utilisation of the funds at their disposal, and even the money approved for this APOs has not been entirely spent.
  • Sporadically, there have also been allegations of misutilisation or diversion of these funds, and in some cases investigations have been ordered

Other problems with the practice:

  • Besides the low utilisation of funds, lack of availability of suitable land remains the biggest problem for compensatory afforestation.
  • The land that is made available for afforestation usually cannot be used for any other purpose, and is often extremely unsuitable for growing plantations.


Q) The showpiece effort for extending India’s forest cover has been its compensatory afforestation programme. Critically Analyse. (150 words)