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Compensatory Afforestation Fund Bill 2015
Aug 22, 2015

The government cleared a Compensatory Afforestation Fund Bill to manage and utilise thousands of crores of rupees that have been collected over the years as compensation for diverting forest land for “non-forest purposes” like setting up industries or infrastructure projects.

Bill will create an “appropriate institutional mechanism, both at the Centre and the states” to utilise these funds for afforestation, and other purposes that would mitigate the effects of diversion of forest land. 

This “institutional mechanism” will replace the Compensatory Afforestation Management and Planning Authority (CAMPA) that currently exists but only in an “ad-hoc” manner. This ad-hoc CAMPA was created on the directions of a 2004 Supreme Court order, after its earlier order to establish a full-fledged CAMPA had not been complied with.

More than Rs 38,000 crore has been collected by various state governments over the years for compensatory afforestation. The money, on directions of the Supreme Court, has been transferred to the central government, in the absence of suitable institutions in the state to use the money. The money, lying unspent, has to be eventually transferred back to the states once they set up these institutions. The proposed law will set up authorities at the national level as well as the state level to use these funds. 

Some Provision of Bill

⇒ The proposed legislation 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. 
⇒ 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. The proposal, therefore, does not involve any additional expenditure on the Centre.

⇒ The Bill provides for among other things:- 

i. Establishment of the National CAF and the State CAFs to credit amounts collected by State Governments and Union Territory Administrations to compensate loss of forest land diverted for non-forest purpose. 

ii. Constitution of a National Authority to manage and utilise amounts credited to the National CAF. 

iii. Constitution of a State Authority in each State and Union Territory to manage and utilise the amounts credited to the State CAFs. 

iv. Establishment of a Monitoring Group to assist the National Authority in monitoring and evaluation of activities undertaken from amounts released from the National CAF and State CAFs. 

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