Compensatory Afforestation Fund Act, 2016

The Compensatory Afforestation Fund Act, 2016

• Aims to manage funds collected for afforestation, required due to forest land diversion for non-forest purposes
• Forest land diverted for non-forest use (e.g., mining, industry) requires planting trees on an equal area of non-forest land, or double the degraded area if needed
• Aims to compensate environmental loss and support forest conservation, related environmental services
• Activities include treatment of catchment areas, assisted natural regeneration, forest management, wildlife protection, relocation of villages, managing human-wildlife conflict, training, awareness programs, supplying wood-saving devices

History and Establishment

• Supreme Court of India (2002) ordered the creation of a CAMPA fund
• CAMPA (2004) established to manage the Compensatory Afforestation Fund (CAF), acting as the custodian
• CAG report (2013) highlighted unutilized CAMPA funds, leading to the 2016 CAF Act
• CAF Act (2016) came into effect 30th September 2018
• National and State Compensatory Afforestation Funds created under Public Account of India and respective states
• State Funds receive 90% of payments, and National Fund gets the remaining 10%

Objectives of the Act

• Establish National and State Compensatory Afforestation Funds
• Ensure effective fund use for compensatory afforestation, forest management, wildlife protection, and ecological restoration
• Maintain transparency and accountability in fund management for conservation and sustainable forest development

Establishment and Management of Funds

• Establishes National and State Funds under the public account
• Funds hold payments from user agencies when forest land is diverted
• Specifies the income sources: compensatory afforestation payments, Net Present Value (NPV) of diverted land, other forest conservation charges
• Ensures continuous fund inflow for restoration and conservation

National Authority

• Creates National Compensatory Afforestation Fund Management and Planning Authority (NCAFMPA)
• Oversees fund disbursement, ensures compliance with regulations and formulates policies for compensatory afforestation
• Approves projects, distributes funds to state authorities, monitors implementation of compensatory afforestation and forest management plans
• Ensures accountability and efficiency in fund utilization nationally

State Authorities

• Establishes State Compensatory Afforestation Fund Management and Planning Authorities (SCAFMPAs)
• Responsible for managing funds allocated for compensatory afforestation projects in their specific state/union territory
• Manages and utilizes funds for afforestation, wildlife protection, and ecosystem restoration at the state level
• Ensures community participation and implements projects based on local ecological needs.

Utilization of Funds

• Funds used for compensatory afforestation projects (planting trees, creating forest cover)
• Used for wildlife management (protection and conservation)
• Supports forest management activities (fire control, soil conservation, pest management, infrastructure development)
• Ensures funds are strictly used for forest and environmental conservation, not diverted to other unrelated projects

Transparency and Accountability

• Annual reports are required from National and State authorities, detailing activities, projects undertaken, and fund utilization, submitted to the Central Government
• Accounts of National and State Funds are audited annually by the Comptroller and Auditor General (CAG) of India
• Audited accounts presented to Parliament and State Legislatures to keep the public and authorities informed about fund usage and project effectiveness