What is Compensatory Afforestation?

Compensatory afforestation means afforestation done in lieu of diversion of forest land for non-forest use.

What does CAF Bill seek?

The Compensatory Afforestation Fund Bill seeks to govern how forests will be raised, cut and resurrected across India.

Background ( Why we need a legislation?)

  • The Forest (Conservation) Act, 1980 (FCA) governs diversion or use of forest land for non-forest purposes such as industrial or infrastructure projects.
  • A company diverting forest land must provide alternative land for taking up compensatory afforestation.
  • For the afforestation purpose, the company should pay for planting new trees in the alternative land provided to the state. The loss of forest ecosystem must also be compensated by paying.
  • In 2002, the Supreme Court of India observed that collected funds for afforestation were underutilised by the states and it ordered for centrally pooling of funds under ad hoc Compensatory Afforestation Fund.
  • The court had set up the ad hoc National Compensatory Afforestation Fund Management and Planning Authority (National CAMPA) to manage the Fund.
  • In 2009, states also had set up State CAMPAs that receive 10% of funds form National CAMPA to use for afforestation and forest conservation.
  • However, in 2013, a CAG report identified that the funds continued to be underutilised.

In the absence of permanent institutional mechanism more than Rs.80,000 crores have accumulated with the said ad-hoc Body i.e. CAMPA. Hence the Bill.

What are the salient features of the passed bill ?

  • It seeks to establish the National Compensatory Afforestation Fund under the Public Account of India, and a State Compensatory Afforestation Fund under the Public Account of each state.
  • The payments into the funds include compensatory afforestation, net present value of forest (NPV), and any project specific payments.
  • The National Fund will get 10% of funds collected and the remaining 90% will go to respective State Fund.
  • The collected funds will be utilised for afforestation, regeneration of forest ecosystem, wild life protection and forest related infrastructure development.
  • The bill also seeks to establish National and State Compensatory Afforestation Fund Management and Planning Authorities to manage the funds.
  • The determination of NPV will be delegated to an expert committee constituted by the central government.
  • The Bill also provides for constitution of an authority at national level and at each of the State and Union territory Administration for administration of the funds and to utilise the monies so collected for
    • undertaking artificial regeneration (plantations),
    • assisted natural regeneration,
    • protection of forests,
    • forest related infrastructure development,
    • Green India Programme,
    • wildlife protection and other related activities and
    • for matters connected therewith or incidental thereto

What is the significance of passed bill?

  • The legislation will ensure expeditious utilization of accumulated unspent amounts available with the ad hoc CAMPA, which presently is of the order of Rs.40,000 crore, and
  • Fresh accrual of compensatory levies and interest on accumulated unspent balance, which will be of the order of approx. Rs. 6,000 crore per annum, in an efficient and transparent manner

What is CAMPA?

CAMPA stands for Compensatory Afforestation Fund Management and Planning Authority . It was a temporary mechanism setup after SC judgement of 2002.

Premise of CAMPA:

  • CAMPA is based on trade-off: environmental concerns will be sacrificed for developmental projects
  • CAMPA believes that forests can be replaced easily

What is proposed?

  • To use money for artificial plantation of trees
  • To use money for building ‘infrastructure development’ and ‘supply of wood’
  • NHAI suggested that CAMPA funds be used for mitigation of wildlife deaths on roads through creation of underpasses and bypasses for animals.


  • We do not have land available for planting new forests.
  • Complex forest systems cannot be recreated easily. Ecological restoration takes time.
  • CAMPA funds has been used for purchasing forest department vehicles or repairing buildings.
  • Afforestation has been undertaken on the flanks of railway lines, highways, and so on, raising trees with poor survival rates but certainly not creating biodiverse forests

What should be done?

  • Rather than creating new and artificial forests, existing forest land should be restored and bought by the forest department using the CAMPA funds.
  • Afforestation should be done in areas like forest corridors like between 2 tiger reserves and eco-sensitive areas like a riparian or estuarine system
  • Infrastructure built should include wildlife impact assessments
  • There are critical ecosystems that require attention and funding today, including marine areas, birding areas, riparian and coastal areas, and high altitude grasslands
  • Funds can and should be channelized for conservation of endangered species.


What do you understand by ‘Compensatory Afforestation’ in the Indian context? The Compensatory Afforestation Fund Bill, 2015 (CAF Bill) has given rise to many apprehensions amongst environmentalists. Critically examine what these¬† apprehensions are and comment on the other objectives of the Bill. (200 Words)

Compensatory afforestation means afforestation done in lieu of diversion of forest land for non-forest use. For this money is collected from companies to whom forest land is diverted.  CAF bill,2015 has following objectives:

  1. To provide an appropriate institutional mechanism, both at the Centre and in each State and Union Territory
  2. To provide safety, security and, transparency in utilization of amounts realised in lieu of forest land diverted for non-forest purpose
  3. Ensure expeditious utilization of accumulated unspent amounts available with the ad hoc Compensatory Afforestation Fund Management and Planning Authority (CAMPA)

But recent CAF Bill has many flaws which have been highlighted by environmentalists as:

  1. The bill promotes breaking of large forest land into smaller patches which disrupts landscape connectivity, affecting dispersal of animals, creates new edges that expose forest to exploitation and severe degradation. Therefore there is no consolidation of OGF (old growth forest) but fragmentation of them.
  2. The species raised are non-native to the areas where they are planted. This causes degradation of indigenous or native species. E.g KIOCL ( Kudremukh Iron Ore Company Ltd.) planted trees in Bhadra river basin which has destroyed natural grassland over there
  3. The compensatory afforestation has only increased tree cover as VDF(very dense forest) and MDF(moderately dense forest) has declined. This was highlighted by Parliamentary Standing Committee on Science & Technology, Environment & forest. This shall be taken into account.
  4. Bill also does not provide for natural restoration and regeneration of degraded forest
  5. Mis utilisation by centre and state government due to corrupt practices in utilisation and cover-up exercise to meet the norms of CAMPA.
  6. With essence of mono-culture and compulsive in nature, Planned man made afforestation cannot compete with the natural forest generation. It is well known fact that biodiversity generation in manmade forests will be several times lower than what usually found in natural forests.
  7. Over-exploitation and slow rate of Regeneration will reverse all the attempts of increased forest cover of 24.01%(as per latest FSI ) which still is miles short of one third forest cover in the country.

The need of the hour is to promote consolidation of OGF, restoring degraded ecology and using funds for nonnative plantations only in extreme case when forest is extremely degraded with no trace of native species

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