Compensatory Afforestation Fund Management and Planning Authority

Compensatory Afforestation Fund Management and Planning Authority (CAMPA) is proposed to be setup at both central and state level to ensure expeditious and transparent utilization of amounts realised in lieu of forest land diverted for non-forest purpose. The utilization of funds is expected to mitigate the impact of diversion of such forest land.


The Forest (Conservation) Act of 1980 governs diversion or use of forest land for non-forest purposes such as industrial or developmental projects. Since forests are an important natural resource and provides us with a variety of ecological services, the Forest (Conservation) Act of 1980 mandates that non-forest land, equal to the size of the forest being diverted be afforested. But, since afforested land cannot become a forest overnight, loss of goods and services like timber, bamboo, fuelwood, carbon sequestration, soil conservation, water recharge, and seed dispersal are still experienced. Moreover, the newly afforested land will take around 50 years to start delivering the comparable goods and services which the diverted land gave just before diversion. To compensate the losses suffered in the interim, the Net Present Value (NPV) of the diverted forest are computed for a period of 50 years, and recovered from the “user agency” that is diverting the forests. The NPV for every patch of forest is computed by an expert committee. At present, the NPV value varies depending upon the quality of forests. It ranges from Rs 4.38 lakh per hectare for low quality forests to Rs 10.43 lakh per hectare for very dense forests. An expert committee has recently recommended increasing it to Rs 5.65 lakh and Rs 55.55 lakh for poor quality and very dense forests respectively.

The afforestation work which needs to be done by the user agencies (more often private agencies) has to be done by the state government instead of that user agency. But the entire expenditure incurred on the process including the purchase of land has to be borne by the user agency. Subsequently, the state government needs to transfer this new forest to the forest department for maintenance and management.

Thus, any user agency which wishes to divert forest land for non-forest purposes has to deposit money for NPV as well as for the compensatory afforestation by the state government. Apart from them a few other charges are also need to be paid by the agency.

Ad-hoc body

A temporary structure is already functioning on the orders of the Supreme Court. In 2002, the Supreme Court of India observed that collected funds for afforestation were underutilised by the states and it directed that an “ad hoc CAMPA” consisting of three officials and one representative of the Central Empowered Committee be set up till the final one is created. Initially, the ad-hoc body was not allowed to disburse money to the states. In 2009, because of continuing delay in instituting the final CAMPA, the Supreme Court allowed the ad hoc body to release Rs 1,000 crore per year to states for the next 5 years. In 2014, the Supreme Court also allowed the States to set up State CAMPAs that receive 10% of funds form National CAMPA to use for afforestation and forest conservation. However, in 2013, a CAG report identified that the funds continued to be underutilised.

The Compensatory Afforestation Fund Bill, 2015

Due to the continuous diversion of forests at the rate of about 20,000-25,000 hectares per year (according to the Ministry of Environment and Forests), a large sum of money is being accumulated by the government. At present, more than Rs 40,000 crore has been realized and it is increasing at the rate of about Rs 6,000 crore every year. So, to manage this money, and to utilize it for the designated purposes the CAMPA is proposed to be set up. The compensatory afforestation money and NPV collected from the user agency by the state government has to be deposited with the central government. The money will be eventually released to the state for compensatory afforestation or related works.

The Compensatory Afforestation Fund Bill 2015 was introduced by the government in Lok Sabha on May 8, 2015 to regulate collected funds. The Bill was referred to the Committee on May 21, 2015. The Standing Committee on Science and Technology, Environment and Forests under the Chairperson Mr. Ashwani Kumar has submitted its report on February 26, 2016. Already a similar law was tabled in the Parliament in 2008, but that too could not be passed because of a lack of consensus in Rajya Sabha.

Salient features of the bill

  • It seeks to establish the National Compensatory Afforestation Fund 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, NPV, and any 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 infrastructure development.
  • The bill also seeks to establish 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.
  • NPV quantifies the services provided by the forest. It includes goods and services (tourism and timber); regulating services (climate change); and none-material benefits (recreation).
  • It seeks to provide safety, security and transparency in utilization of CAMPA funds which are currently kept in Nationalized Banks and managed by an ad-hoc body. These funds would be brought under the focus of Parliament and State Legislatures by transferring them to non-lapsable interest bearing funds.


The main difficulty in implementation is the availability of non-forest land for afforestation. As per the law, the chosen land needs to be preferably contiguous to the forest being diverted so that it will become easier for forest officials to manage it. But in case of non-availability of land near to the forest being diverted, land in any other part of the state can be used for the purpose. In case suitable non-forest land cannot be found, then the degraded forests can be chosen for afforestation, but in such cases, twice the area of diverted forest has to be brought under afforestation. Although the law provides flexibility in choosing the forest lands, still difficulty is faced especially in smaller states and heavily forested states like Chhattisgarh to find non-forest lands for afforestation.

Secondly, although the fund was envisaged to be used for compensatory afforestation, the Compensatory Afforestation Fund Bill has expanded its scope of use to include general afforestation programme run through the Green India Mission, forest protection, forest management, forest and wildlife related infrastructure development, wildlife conservation, and relocation of people from protected wildlife areas. Critics argue that the diversion of funds for other activities would take away the focus from the prime objective of compensating for the forest cover lost to developmental or industrial development.


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