Introduction of the Compensatory Afforestation Fund Bill in the Indian Parliament on 29th April 2015 is the biggest development in the forestry sector in India. The bill seeks to provide an institutional mechanism, both at the Centre and State, to manage the funds under the public accounts of India collected from user agencies diversion of forests land for non-forestry purposes under the Forest (Conservation) Act, 1980. The bill proposes to constitute authorities and a Compensatory Afforestation Fund (CAF) at the national level and at each of the State and Union territory Administration for administration of the funds collected by state governments in lieu of forest land diverted for non-forest purposes and to utilise the funds collected for afforestation activities.
It is well known that as of date over Rs. 38,000 crores are lying unspent in the ad hoc Compensatory Afforestation Fund and there is a fresh accrual of compensatory levies and interest on accumulated unspent balance, which is of the order of approximately Rs. 6,000 crore per annum”. Given the huge sum of money accruing in the fund and the potential impact that effective management of the funds could have on the forests, forest dwelling communities in the country and help meet India’s targets for climate change, the provisions of the bill vis a vis its management, utilization of the fund and more importantly the manner in which it visualizes regeneration of forests in India become crucial.
The overall structure proposed by the bill are two separate funds: one at the national level known as the Nation Compensatory Afforestation Fund (NCAF) and one at the level of each state, known as the State Compensatory Afforestation Fund (SCAF). These are to be backed by national and state authorities, constituted under the Act and a national level monitoring agency. One of the notable features of the bill is that there is provision for direct crediting of funds collected into the state accounts, without routing them through the Central Fund. However, at the same time, the bill also proposes a strong Central Government control over the fund management and its utilization.
 These include funds collected for compensatory afforestation, additional compensatory afforestation, penal compensatory afforestation, net present value, undertaking activities related to protection of biodiversity or wildlife and all other amounts recovered from such agencies under the Forest (Conservation) Act, 1980
 These, as per the Bill, include “artificial regeneration (plantations), assisted natural regeneration, protection of forests, forest related infrastructure development, Green India Programme, wildlife protection and other related activities and for matters connected therewith or incidental thereto”.
(Blogger: Suparna Jain)