Compensatory Afforestation Fund Rules


  • Union Ministry of Environment, Forest and Climate Change (MoEFCC) has notified rules for utilisation of more than Rs 66,000 crore afforestation funds by states/UTs and for setting up authorities to monitor its use for afforestation and conservation.
  • The rules have been framed two years after Compensatory Afforestation Fund (CAF) Act, 2016 to this effect was enacted.


About the fund:

  • The fund is accumulated amount which user agencies have been depositing as compensation for diverting forest land for non-forest purposes such as setting up industries or creating infrastructure, over the past 10 years.
  • Since rules for utilisation of fund have been notified, unspent amount will now be transferred to National Compensatory Afforestation Fund (NCAF) at Centre and respective State Compensatory Afforestation Funds in phased manner, depending on its utilisation.
  • The national and state compensatory afforestation funds are both non-lapsable and have been established under Public Account of India and Public Account of each state.
  • They can be utilised for only activities listed under the CAF Act.


Key Features of Rules

  • The rules specify that 80% of compensatory afforestation amount will be utilised by states for plantations, assisted natural regeneration of forests, pest and disease control in forest, forest fire prevention, soil and moisture conservation works and improvement of wildlife habitat, among other things from list of 13 permissible activities.
  • The remaining 20% will be used for 11 listed works to strengthen infrastructure related forest and wildlife protection.
  • The list includes third-party monitoring of works, development of certification standards, forest certification and casual hiring of local people to assist forest department staff.
  • It also specifies that working plan will be taken up in consultation with the gram sabha or village forest management committee.


Need of Rules:

  • Though Parliament had enacted Compensatory Afforestation Fund (CAF) Act, 2016 to utilise money, it could not be implemented in absence of enabling rules within Act for two years.
  • As result, only Rs 14,418 crore out of Rs 80,716 crore were disbursed to states/UTs under temporary and time-consuming mechanism.
  • The remaining Rs 66,298 crore therefore has been lying unspent with ad hoc Compensatory Afforestation Fund Management and Planning Authority (CAMPA) created by Supreme Court order in 2009.
  • Among states, Odisha has highest share (Rs 9,725 crore) in accumulated fund, followed by Chhattisgarh (Rs. 7,288 crore), Madhya Pradesh (Rs 6,353 crore) and Jharkhand (Rs 5,193 crore).

Criticism of rules:

  • Former Union Environment Minister Jairam Ramesh has objected to the rules.
  • He alleged that the CAF Rules “undermined” several aspects of the Forest Rights Act (FRA) and the Panchayats (Extension to Scheduled Areas) Act (PESA).
  • In the current form, they significantly reduced the authority of gram sabhas in having a say in their local compensatory afforestation projects and reduced them to the role of “consultants”.
  • Much power instead was vested with the State-level forest bureaucracy. - Compensatory Afforestation Fund Rules

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