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Parliament passes much awaited Compensatory Afforestation Fund bill, 2016

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Parliament has passed the much talked about Compensatory Afforestation Fund bill, 2016 that seeks for the disbursement of nearly Rs 41,000 crore, reserved for forest land and lying unexpended for four years.

What is a Compensatory Afforestataion Fund Bill?

  • 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 realized in lieu of forest land diverted for non-forest purpose. This would mitigate impact of diversion of such forest land.PARLIAMENT
  • This bill also ensure expeditious utilization of accumulated unspent amounts available with the 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.
  • This proposed also provides safety, security and, transparency in utilization of these amounts, which currently are being kept in Nationalized Banks and are being managed by an specific body and the 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 CAMPA.
  • 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.
  • These 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.

Benefits of this Bill:-

These Funds will receive payments for:

  • Compensatory afforestation,
  • Net present value of forest (NPV), and
  • Other project specific payments. 

The National Fund will receive 10% of these funds, and the State Funds will receive the remaining 90%.These Funds will be primarily spent on afforestation to compensate for loss of forest cover, regeneration of forest ecosystem, wildlife protection and infrastructure development. The Bill also establishes the National and State Compensatory Afforestation Fund Management and Planning Authorities to manage the National and State Funds.

What this bill emphasizes apart from this?

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 utilize amounts credited to the National CAF.
iii. Constitution of a State Authority in each State and Union Territory to manage and utilize 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.