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Parliament Clears Compensatory Afforestation Fund Bill
Aug 04, 2016

The Parliament passed the Compensatory Afforestation Fund Bill, 2016. The bill provides for establishment of funds at the Centre and state levels for compensatory afforestation.

  • Under the bill, states will get 42 thousand crore rupees for afforestation and related activities.
  • It also has a provision for setting up of authorities, both at the national and state levels, for administration of funds and utilization of funds by the user agencies to undertake plantations, protection of forests and forest-related infrastructure development.
  • Odisha will get maximum amount of around six thousand crore rupees out of this fund.
  • Clause 6 of the Bill has the provisions of consultation with Gram Sabhas in the areas where Scheduled Tribes and other traditional dwellers are living.
  • The Bill 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.

Background: Central Government while according prior approval under the Forest (Conservation) Act, 1980 for diversion of forest land for non-forest purpose stipulates conditions to the effect that the State Government shall realize funds from the user agency for compensatory afforestation, catchment area treatment plan, wildlife management plan etc. to mitigate impact of diversion of forest land. 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 Central Government in exercise of powers conferred under Section 3 (3) of the Environment (Protection) Act, 1986 constituted Compensatory Afforestation Fund Management and Planning Authority (CAMPA). However, the CAMPA could not be operationalized.

In 2008 Central Government formulated the Compensatory Afforestation Fund Bill, 2008.  The Bill was passed by the Lok Sabha on 23rd December, 2008. However, the Bill could not be taken up for discussion in Rajya Sabha. On dissolution of the 14th Lok Sabha, the Bill lapsed.

On 13th May, 2015 Lok Sabha referred the Bill to the Department Related Parliamentary Standing Committee on Science & Technology, Environment & Forests. The Committee held extensive consultations with the States/UTs and various other stakeholders. The committee submitted its report containing 26 recommendations. The Central Government accepted 20 recommendations.   Based on recommendations of the Committee and further examination of the Bill, the Central Government moved 49 official amendments.


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