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Green Credit Scheme

Topics Covered: Conservation related issues.

Green Credit Scheme

What to study?

For Prelims: Key features of the scheme.

For Mains: Significance of the scheme.

Context: Forest Advisory Committee has approved the implementation of Green Credit scheme.

 Key features of the scheme:

It allows “forests” to be traded as a commodity.

It allows the Forest Department to outsource one of its responsibilities of reforesting to non-government agencies.


  1. The scheme allows agencies — they could be private companies, village forest communities — to identify land and begin growing plantations.
  2. After three years, they would be eligible to be considered as compensatory forest land if they met the Forest Department’s criteria.
  3. An industry needing forest land could then approach the agency and pay it for parcels of such forested land, and this would then be transferred to the Forest Department and be recorded as forest land.
  4. The participating agency will be free to trade its asset, that is plantation, in parcels, with project proponents who need forest land.

Present scenario:

  1. In the current system, industry needs to make good the loss of forest by finding appropriate non-forest land — equal to that which would be razed.
  2. It also must pay the State Forest Department the current economic equivalent — called Net Present Value — of the forest land.
  3. It’s then the Forest Department’s responsibility to grow appropriate vegetation that, over time, would grow into forests.

Need for change:

  1. Industries have often complained that they find it hard to acquire appropriate non-forest land, which has to be contiguous to existing forest.
  2. Nearly ₹50,000 crore had been collected by the Centre over decades, but the funds were lying unspent because States were not spending the money on regrowing forests.
  3. The Supreme Court intervened, a new law came about with rules for how this fund was to be administered. About ₹47,000 crore had been disbursed to States until August, but it has barely led to any rejuvenation of forests.


This is not the first time that such a scheme has been mooted. In 2015, a ‘Green Credit Scheme’ for degraded forest land with public-private participation was recommended, but it was not approved by the Union Environment Minister, the final authority.

Benefits of the scheme:

Such a scheme will encourage plantation by individuals outside the traditional forest area and will help in meeting international commitments such as sustainable development goals and nationally determined contributions.

Sources: The Hindu.