What is the Compensatory Afforestation Fund Act 2016?

The Compensatory Afforestation Fund Act, 2016 received the assent of the President on the 3rd of August 2016. It is a special Fund established under the public account of India. It collects compensation money from the user agencies that use forest land for commercial activities such as mining and industries.

The National Fund is under the control of the Central Government and managed by the National Authority.

This fund was established after the direction of the Supreme Court of India.

The Supreme Court in its order in T.N. Godavarman Thirumulpad vs. Union of India and Others dated 30th October 2002, observed that a Compensatory Afforestation Fund should be created in which all the money received from the user agencies towards compensatory afforestation, additional compensatory afforestation, penal compensatory afforestation, the net present value of the diverted forest land or catchment area treatment plan shall be deposited.

What is Compensatory afforestation?

Compensatory afforestation means whenever forest land is diverted for a non-forest activity like mining, or setting up industry. The user agency will have to pay money for planting forests over an equal area of non-forest land, or when such land is not available, twice the area of degraded forest land.

According to the rules, 90 percent of this fund will go to the state government, while the center can keep 10 percent to itself.

This fund can be used only for environment-related works like forest management, wildlife protection, relocation of villages, human-wildlife conflict, training awareness, and supply of safety devices.

Supreme Court has directed that, besides artificial regeneration (Plantations), the Fund shall also be utilized for undertaking assisted natural regeneration, protection of forests, infrastructure development, wildlife protection, and other related activities, and an independent system of concurrent monitoring and evaluation should be evolved and implemented through the CompensatoryAfforestation Fund to ensure effective and proper utilization of funds.

Recently, the Ministry of Environment released about Rs 47,436 crore afforestation funds to 27 states, which was pending for a long time.

This money was recovered from the industries under compensatory afforestation.

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