Parliament Passes Compensatory Afforestation Fund Bill, 2016 [ Current Affairs - Policies & Governance ]

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On 28 July, the Compensatory Afforestation Fund Bill, 2016 was passed by the Parliament, along with the Rajya Sabha’s approval.The bill provides for establishment of funds at the Centre and state levels for compensatory afforestation.

Image shows the Parliament

Image shows the Parliament

showing image of Parliament

  • Under the bill, states will get 42,000 crore rupees for afforestation and related activities.
  • It also has a provision for setting up of authorities, both at the national and state levels, for administration of funds and utilization of funds by the user agencies to undertake protection of forests and forest-related infrastructure development.

Relevant structures of the bill  

  • Establish National Compensatory Afforestation Fund (NCAF) under the Public Account of India, and a State Compensatory Afforestation Fund under the Public Account of each state.
  • The payments into the funds include compensatory afforestation, net present value of forest (NPV), and any project specific payments.
  • NCAF will get 10% of funds collected and remaining 90% will go to respective State Fund.
  • The collected funds will be utilised for afforestation, regeneration of forest ecosystem, wild life protection and forest related infrastructure development.
  • Establish National and State Compensatory Afforestation Fund Management and Planning Authorities to manage the funds.
  • The determination of NPV will be given to an expert committee constituted by the central government.

Net present value (NPV) of forest

  • It is the value of diverted forest, which is calculated and recovered from the user agency for diverting forests.
Net present value (NPV) of forest

Net present value (NPV) of forest

showing image of Net present value (NPV) of forest

  • Basically, an expert committee calculates the NPV for every patch of the forest. It is calculated for 50 years period.
  • A recent controversial bill outlines a framework for the utilisation of compensatory afforestation funds is being strongly contested and challenged by civil society actors.
  • It raises important questions that are fundamentally connected to forests: Whose are they and who should be compensated for their loss.
  • The Compensatory Afforestation, Management and Planning Authority (CAMPA) has over the years accumulated a staggering Rs 41,000 crore as recompense for forest land having been diverted for non-forestry purposes.
  • The amount is calculated on the Net Present Value (NPV) of the diverted forest and the cost of afforestation.
  • It provide range between Rs 5-11 lakh per hectare depending on the type and condition of a forest.

- Published on: August 2, 2016