Print Friendly, PDF & Email

Unused funds, unsuitable land: The problems with Compensatory Afforestation in India

GS Paper 3

 Syllabus: Conservation, environmental pollution and degradation, environmental impact assessment


Source: IE

 Context: Compensatory afforestation forms a significant component of various reforestation programmes being implemented in India.



  • India has promised to increase its forest and tree cover to absorb an additional 2.5 – 3 billion tonnes of CO2 equivalent by 2030.
  • However, the forestry target is difficult to achieve due to the need for rapid industrial, infrastructure development, and urbanisation.
  • In the last 10 years, more than 1,611 square km of forest land (a third of this in the last three years) has been cleared.
  • But government data shows that total forest cover had increased by 1,540 square km in the two years between 2019 and 2021.

Programmes with compensatory afforestation component:

  • Green India Mission,
  • National afforestation programme
  • Tree plantation exercises along the highways and railways
  • National rural employment guarantee scheme (MGNREGS)
  • Namami Gange, etc


What is Compensatory Afforestation?

  • The compensatory afforestation programme ensures that forest lands getting ‘diverted’ for non-forest purposes is mandatorily accompanied by afforestation on an equal area of land.
  • It was made a legal requirement through the Compensatory Afforestation Fund (CAF) Act 2016.
  • Though the law came in 2016, the concept has existed since the 1980s, as an offshoot of the Forest Conservation Act 1980.



Salient provisions of the CAF Act 2016:

  • Newer parcels of land are earmarked for development as forests.
  • Project developers (public/private) are required to fund the entire afforestation activity on these new lands.
  • Project developers are also asked to pay for the Net Present Value (NPV) of the forests being cleared, as the new lands cannot be compared with the fully grown forests getting diverted.
  • According to recent calculations, companies have to pay NPV between Rs 9.5 lakh and Rs 16 lakh per hectare, depending on the quality of forests getting diverted.
  • All this money is meant for increasing/improving the quality of forest cover in the country.


How money is disbursed for compensatory afforestation?

  • The money is parked in special funds created for this purpose at the Central and state levels.
  • The money is first deposited in the Central fund, from where it gets disbursed to states where the projects are located.
  • State governments prepare an annual plan of operations → approved by the Compensatory Afforestation Management and Planning Authority (CAMPA) at the Central level → the state government transfers funds to the state forest departments → carry out the work.
  • The Central fund can keep up to 10% of the total money for administrative expenses.


Issues faced by the compensatory afforestation:

  • Legitimised clearing of forests and see it as an example of greenwashing.
  • Money collected before 2016 had remained largely unutilised. For example, much of the Rs 55,000 crore in the state funds remains locked.
  • Allegations of misutilisation or diversion of these funds.
  • Lack of availability of suitable land/unavailability of land in a contiguous stretch remains the biggest problem.
  • Land made available for afforestation cannot be used for any other purpose and is unsuitable for growing plantations.
  • Often the plantations are monocultures, which is against the core concept of biodiversity.
  • Biotic pressures – plantations face nearby human habitations and cattle.


Conclusion: As the clearing of forests cannot be entirely eliminated, compensatory afforestation is a good mechanism to make up for these losses to some extent. However, the above issues need to be addressed.


Insta Links: