According to Supreme Court orders, only 10 per cent of the amount accrued with CAMPA

is being released to the states for the fear of it being misused. States had been
demanding the release of more funds from CAMPA. To address this demand, the
government has come up with the new Bill.
The Bill intends to establish a National Compensatory Afforestation Fund (CAF) and statelevel CAF to credit amounts collected by state governments in lieu of forest land diverted
for non-forest purposes. CAF authorities will be created at the Centre and state level to
control and manage these funds. As per the Bill, a monitoring group will also be
established to assist the national authority in evaluation of activities undertaken from
amounts released from the national CAF and state CAFs.The proposed law seeks to
provide an institutional mechanism, both at the Centre and in the states, to ensure
expeditious utilisation of the amounts realised from diversion of forest land to nonforest purposes. As per law, the promoter of a project coming up on forest land needs to
deposit an amount with the government for afforestation of non-forest land equal to the
land diverted or of degraded forest land twice the area of land diverted. Besides, the
project proponent also deposits a net present value of the forest in lieu of the nontangible benefits lost with the loss of forests. Such amounts are currently kept in
nationalised banks and are being managed by an ad-hoc Compensatory Afforestation
Management and Planning Authority (CAMPA).
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 Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its
approval for introduction of the Compensatory Afforestation Fund Bill, 2015 in Parliament
during the current session.
The proposed legislation seeks to provide an appropriate institutional mechanism, both
at the Centre and in each State and Union Territory, to ensure expeditious utilization in
efficient and transparent manner of amounts realised in lieu of forest land diverted for
non-forest purpose. This would mitigate impact of diversion of such forest land.
The proposed legislation also 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.
The proposed legislation will also ensure expeditious utilization of accumulated unspent
amounts available with the ad hoc Compensatory Afforestation Fund Management and
Planning Authority (CAMPA), which presently is of the order of Rs. 38,000 crore, and fresh
accrual of compensatory levies and interest on accumulated unspent balance, which will
be of the order of approximately Rs. 6,000 crore per annum, in an efficient and
transparent manner.
Utilization of these amounts, will facilitate timely execution of appropriate measures to
mitigate impact of diversion of forest land, for which these amounts have been realised.
Apart from mitigating the impact of diversion of forest land, utilisation of these amounts

will also result in creation of productive assets and generation of huge employment
opportunities in rural areas, especially in backward tribal areas.
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 propses to establish the National Compensatory Afforestation Fund (CAF) and the
State Compensatory Afforestation Fund (CAF) to credit amounts collected by State
Governments and Union Territory Administrations to compensate loss of forest land
diverted for non-forest purpose.
Bill proposes to constitute a National Authority to manage and utilise amounts credited
NCAF and similar state authority in each State to manage State CAFs. Bill makes
provisions to establish a Monitoring Group to assist the National Authority in monitoring
and evaluating activities undertaken from amounts released from the National CAF and
State CAFs.
As the diversion of forest land for non-forestry purposes was causing loss to the valuable
forests, the Forest (Conservation) Act, 1980 was enacted to maintain a rational balance
between the objectives of conservation and development. The Forest (Conservation) Act,
1980 makes provision for conservation of forest and provide for the basic framework for
regulating indiscriminate diversion or use of forest for the developmental needs of a
State. It intends to harmonize development with that of conservation of forests and forest
eco system.
The compensatory afforestation envisages additional plantation activities by utilising the
money deposited by the user agency for the purpose.
2. The Hon'ble Supreme Court in its order in TN. Godavarman Thirumulpad v. Union of
India [Writ Petition (C) No. 202 of 1995], dated 30th October, 2002, observed that a
Compensatory Afforestation Fund may be created in which all the monies received from
the user agencies shall be deposited. The Court directed that the Fund shall be utilised
for plantations, protection of forests, wildlife protection and other related activities.
Presently, in compliance with the direction of the Supreme Court, all monies collected
under the scheme has been placed under an ad hoc Compensatory Afforestation Fund
Management and Planning Authority (CAMPA) and deposited in the nationalised banks.
3. The Hon'ble Supreme Court in its Judgment dated the 26th September 2005 in the
aforesaid case observed that the fund generated for protecting ecology and providing
regeneration should not be treated as a fund under article 266, article 283 or article 284
of the Constitution. Funds are therefore; kept outside the Consolidated Fund of India or
Public Account of India. In the absence of proper institutional mechanism with adequate
statutory backup amount of unspent funds has increased to more than rupees thirty
eight thousand crorers.
4. The Comptroller and Auditor General in its report on Compensatory aforestation in
India (21 of 2013) observed that given the substantial amounts of funds being collected
under the compensatory afforestation, the expenditure therefrom, the overall objectives
of conservation, protection, regeneration and management of forests, conservation,
protection and management of wild life and its habitats and compensatory afforestation;
the clear public purpose involved in the work relating to CAMPA, there is need to review

the existing paradigm of CAMPA. The Comptroller and Auditor General recommended that
this should be done in a way that enhances transparency, brings CAMPA within the
broader focus of both Parliament and State Legislatures and in greater public view so as
to ensure the largest possible stakeholders' participation. Towards this end it would be
appropriate if the amounts lying in ad hoc CAMPA are transferred into the Public Account.
The Comptroller and Auditor General has also observed that the receipts accruing into
the ad hoc CAMPA are essentially payments being made for the acquisition of public
assets, namely, forest land for non-forest purposes by user agencies. The receipts, so
arising, in essence are non-tax revenue, as are forest receipts.
5. Accordingly, to ensure safety, security and expeditious utilisation in a transparent
manner of funds accumulated with the ad hoc CAMPA and the funds to be collected by
the State Governments and Union territory Administrations it is proposed to enact a
legislation, namely, the Compensatory Afforestation Fund Bill, 2015 to provide for the
establishment of a Statutory Fund and a Management Authority at the National level and
at each State and Union territory.