It refers to the afforestation and regeneration activities carried out as a way of compensating for forest land which is diverted to non-forest purposes. The Forest (Conservation) Act, 1980 provides that whenever a forest land is to be diverted for nonforestry purposes, the equivalent non forest land has to be identified for compensatory afforestation and funds for raising compensatory afforestation are to be imposed.The act further requires that:

•  in case, non-forest land for CA is not available in the same district, non-forest land for CA is to be identified anywhere else in the State/Union Territory.
•  If non forest land is unavailable in the entire State/ UT, funds for raising CA in double the area in extent of the forest land diverted need to be provided by the user agency on the basis of the rates fixed by the State Forest Department.
•  the non-forest land for CA are to be identified contiguous to or in the proximity of Reserved Forest or Protected Forest, as far as possible.

Compensatory Afforestation Fund (CAF) Act came into force in 2016.Over Rs. 50,000 crore has been collected under CAMPA fund in lieu of forest land diverted to non-forest purposes such as industrial projects like mining. Currently State receives only 10% of funds to use for afforestation and forest conservation, as against the Act’s promise of 90%.

Compensatory Afforestation Fund Act 2016

It established National Compensatory Afforestation Fund (NCAF) under the Public account of India and State Compensatory Afforestation Funds under public accounts of states.These funds will receive payments for:

•  compensatory afforestation,
•  net present value of forest (NPV),
•  Other project specific payments.

The National Fund will receive 10% of these funds, and the State Funds will receive the remaining 90%. The funds will be non-lapsable and interest bearing by the rate decided by central government on a yearly basis.The fund will be used for compensatory afforestation, additional compensatory afforestation, penal compensatory afforestation, net present value, catchment area treatment plan or any money for compliance of conditions stipulated by the Central Government while according approval under the provisions of the Forest (Conservation) Act, 1980. Act provides statutory status for two ad-hoc institution, namely;

•  National Compensatory Afforestation Fund Management and Planning Authority (CAMPA) for management and utilisation of NCAF.
•  State Compensatory Afforestation Fund Management and Planning Authority for utilisation of State Compensatory Afforestation Fund.
•  The act also seeks to provide for constitution of a multidisciplinary monitoring group to monitor activities undertaken from these funds.

The act also provides for annual audit of the accounts by the Comptroller and Auditor General. Recently Forest Survey of India has taken an initiative namely, e-green watch, for online monitoring of various afforestation works being carried out by state forest departments under CAMPA.

Issues with compensatory afforestation in India

• Forest as commodity: The principle of CA reduces a “forest” to a “commodity which acquires certain area on the ground”. Its loss are deemed to be compensated financially. Its ecology, biodiversity and ecosystem services were completely ignored.
• Lack of monitoring mechanism for expenditure from funds: despite findings of Comptroller and Auditor General in 2013 about massive misutilization of funds by the forest department.
• Capacity building of state forest departments: as utilisation of 90% of funds depend on it and they lack the planning and implementation capacity to carry out compensatory afforestation
• Difficulty in procuring land: as land is a limited resource, and is required for multiple purposes, such as agriculture, industry, etc. The problem is compounded by unclear land titles.
• Low quality forest cover: compensatory afforestation cannot make up for the ecological value lost by cutting the existing forests. Also, computing the appropriate NPV of a forest is a challenge.
• Increase atrocities against tribals and forest dwellers: as it create scope for illegal plantations by forest departments and the joint forest management committees.

Way forward

• Along with the forest bureaucracy the CAMPA funds can also be entrusted to local communities to further strengthen local rights and empower communities to restore forests and degraded lands.
• India has a large number of such examples of communities taking up ecological restoration at low costs. The decision over where, what and how to plant and regenerate degraded lands, instead of being in the hands of a distant, inefficient bureaucracy, needs to be in the hands of local communities, who have the capacity to undertake adaptive management and maintain close oversight.
• Innovative systems of incentives and direct payments can be designed using remote sensing.
• Using CAMPA funds to support community-based afforestation will also lead to major positive social and ecological outcomes. It will ensure a flow of Rs 4,000-5,000 crore to some of the poorest communities, as wage labour every year, with positive spin-offs in terms of improved incomes, poverty alleviation, food security and nutrition as well as better ecological outcomes in terms of eco-restoration, biodiversity conservation and carbon sequestration.