Lok Sabha passes Compensatory Afforestation Fund Bill, 2015

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The Lok Sabha on 3rd May 2016 passed the much talked about Compensatory Afforestation Fund bill, 2015 that seeks to establish setting up of a National Compensatory Afforestation Fund and also a State Compensatory Afforestation Fund  to receive money from industries for compensatory afforestation and to assist natural regeneration of forests. 

The bill paves the way for unlocking of nearly Rs.41,000 crore worth of funds for state governments for forest land which is lying unspent for about four years. 90 per cent of the amount will go to states and the remaining will be there with the central government.

Salient features of the bill

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 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 establishes the National and State Compensatory Afforestation Fund Management and Planning Authorities to manage the National and State Funds.


  • The diversion or use of forest land for non-forest purposes such as industrial or infrastructure projects is governed under the laws of Forest (Conservation) Act, 1980 (FCA) which says : 
  • "A company that is diverting forest land must provide alternative land for taking up compensatory afforestation and should also pay for planting new trees in the alternative land provided to the state.The loss of forest ecosystem must also be compensated by paying for Net present value of forest (NPV) "
  • In 2002, the Supreme Court of India observed that collected funds for afforestation were underutilised by the states so it passed an order 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. 
  • Currently the ad hoc Compensatory Afforestation Fund Management and Planning Authority (CAMPA), formed on the directions of the Supreme Court, handles the corpus of funds collected by state governments and union territories, that has accumulated to nearly Rs 40,000 crore.

Improvement in India's Forest cover

  • As per the reports released by Forest Survey of India (FSI), in 2015 the country's forest cover increased by 3,775 sq km to take it to a total of 7,01,673 sq km, which is 21.34 per cent of the country's geographical area (GA).
  • India's carbon sink which is crucial in the current need to reduce carbon dioxide from the air, has also increased by 103 million tonnes to 7044 million tonnes in 2015.
  • Tree cover has gone up by 1,306 sq km to a total of 9,2,572 sq km or 2.82 per cent of the country's GA. Even the mangrove cover of the country has increased by 112 sq km to 4,740 sq km.

State-wise forest cover

State Area (in million hectares)
Madhya Pradesh 7.75
Arunachal Pradesh 6.73
Chhattisgarh 5.6
Maharashtra 5.06
Odisha 5.03


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