Parliament passes Compensatory Afforestation Fund Bill, 2016

The Parliament has passed the Compensatory Afforestation Fund Bill, 2016 after it was approved by the Rajya Sabha.
The bill provides for establishment of funds under the public accounts of the Centre and State levels for compensatory afforestation.
Salient features of the bill

  • Establishes National Compensatory Afforestation Fund (NCAF) 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 NCAF 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.
  • Establishes 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.

Net present value (NPV) of forest: It is the value of diverted forest which is calculated and recovered from the user agency for diverting forests. It is calculated for 50 years period. Basically an expert committee calculates the NPV for every patch of the forest.

  • The legislation will allow states to access nearly 42000 crore rupees that is lying idle and channel it into afforestation projects.
  • It has provisions for administration of funds and utilization of funds by the user agencies to undertake plantations, protection of forests and forest-related infrastructure development.



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