Union Ministry of Environment, Forest and Climate Change (MoEFCC) has notified rules for utilisation of more than Rs 66,000 crore afforestation funds by states/UTs and for setting up authorities to monitor its use for afforestation and conservation.

• The rules have been framed two years after Compensatory Afforestation Fund (CAF) Act, 2016 to this effect was enacted.
• The fund is accumulated amount which user agencies have been depositing as compensation for diverting forest land for non-forest purposes such as setting up industries or creating infrastructure, over the past 10 years.
• Since rules for utilisation of fund have been notified, unspent amount will now be transferred to National Compensatory Afforestation Fund (NCAF) at Centre and respective State Compensatory Afforestation Funds in phased manner, depending on its utilisation.
• The national and state compensatory afforestation funds are both non-lapsable and have been established under Public Account of India and Public Account of each state.
• They can be utilised for only activities listed under the CAF Act. Though Parliament had enacted Compensatory Afforestation Fund (CAF) Act, 2016 to utilise money, it could not be implemented in absence of enabling rules within Act for two years.

As result, only Rs 14,418 crore out of Rs 80,716 crore were disbursed to states/UTs under temporary and time-consuming mechanism. The remaining Rs 66,298 crore therefore has been lying unspent with ad hoc Compensatory Afforestation Fund Management and Planning Authority (CAMPA) created by Supreme Court order in 2009.