Tuesday, Feb 07, 2023

CAMPA: The manager of afforestation funds

Because of developmental or industrial requirements, forests are routinely cut, or, as it is said in official language, “diverted for non-forest purposes”.

New ideas are needed to protect India’s forests, reduce horrors of climate change. New ideas are needed to protect India’s forests, reduce horrors of climate change.

On the last day of the recently concluded Rajya Sabha session, Prime Minister Narendra Modi told retiring members that they would probably have felt more satisfied had two crucial pieces of legislation been passed during their tenure. One, the PM said, was the constitutional amendment related to the Goods and Services Tax; the other was about setting up a new institution called CAMPA — Compensatory Afforestation Management and Planning Authority. While the GST has been widely discussed, relatively little is known about the other legislation.

Compensatory Afforestation

The simple principle at work here is that since forests are an important natural resource and render a variety of ecological services, they must not be destroyed. However, because of developmental or industrial requirements, forests are routinely cut, or, as it is said in official language, “diverted for non-forest purposes”. In such cases, the Forest (Conservation) Act of 1980 requires that non-forest land, equal to the size of the forest being “diverted”, is afforested.


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But since afforested land does not become a forest overnight, there is still a loss of the goods and services that the diverted forest would have provided in the interim period. These goods and services include timber, bamboo, fuelwood, carbon sequestration, soil conservation, water recharge, and seed dispersal. Afforested land is expected to take no less than 50 years to start delivering comparable goods and services. To compensate for the loss in the interim, the law requires that the Net Present Value (NPV) of the diverted forest is calculated for a period of 50 years, and recovered from the “user agency” that is “diverting” the forests.

An expert committee calculates the NPV for every patch of forest. Currently, the NPV ranges from Rs 4.38 lakh per hectare in case of poor quality forests to Rs 10.43 lakh/ha for very dense forests. An expert committee has recently recommended that this be revised to Rs 5.65 lakh and Rs 55.55 lakh respectively.

“User agencies”, which are often private parties, are not expected to undertake afforestation work themselves. This work has to be done by the state government. But the entire expenditure to be incurred on creating this new ‘forest’, including purchase of land for the purpose, has to be borne by the user. The state government eventually has to transfer this land to the forest department for maintenance and management.

Thus, if any user agency wants to divert forest land for non-forest purposes, it has to deposit money for compensatory afforestation as well as pay the NPV, besides a few other charges. Since forests are being diverted routinely (at the rate of about 20,000-25,000 ha per year according to the Ministry of Environment and Forests) a large sum of money is accruing to the government. Currently, more than Rs 40,000 crore has accumulated from these sources, and the fund is increasing at the rate of about Rs 6,000 crore every year.


It is to manage this money, and to use it for the designated purposes, that CAMPA is proposed to be set up. The compensatory afforestation money and NPV are supposed to be collected from the user agency by the government of the state in which the project is located, and deposited with the central government. The money will eventually flow back to the state to be used for afforestation or related works.


The Compensatory Afforestation Fund Bill has been passed by Lok Sabha but is awaiting clearance in the Upper House. It seeks to create a national CAMPA at the central government level, and a state CAMPA in each state and UT. Similarly, a National Compensatory Afforestation Fund (CAF), and one in each state and UT too are sought to be created. The states would deposit money collected from user agencies with the national CAF, to be eventually credited into state CAFs as per their entitlement. The states would, however, receive only 90% of their share; the other 10% would be held back to cover administrative expenses.


A temporary structure of this kind is already functioning. The Supreme Court, whose orders since 1996 have forced major changes in the way forests are managed, directed in 2006 that an “ad hoc CAMPA” be set up till the final one is created. Initially, this ad hoc body was to be used only for receiving funds coming in from user agencies. It was not supposed to start disbursing money to the states. However, because of continuing delay in instituting the final CAMPA, the Supreme Court, in 2009, allowed the ad hoc body to release Rs 1,000 crore per year to states for the next five years. Later, in 2014, the court ordered that every state could draw 10% of the amount due to them per year (See table).

In the absence of the real CAMPA, which requires a new law, most of the Rs 40,000 crore is locked — and cannot be disbursed to states. The previous government had tried to enact a similar law in 2008, but that too could not be passed in Rajya Sabha because of a lack of consensus.



While the principle of compensatory afforestation, and the need for payment of NPV, is fairly straightforward, the implementation is plagued with complications. The main difficulty has been the availability of non-forest land for afforestation. The law says the land selected should preferably be contiguous to the forest being diverted, so that it is easier for forest officials to manage it. But in case that is not possible, land in any other part of the state can be used for the purpose. If no suitable non-forest land is found, degraded forests can be chosen for afforestation, but in that case, twice the area of diverted forest has to be afforested. Still, there is difficulty in finding land, especially in smaller states, and in heavily forested ones like Chhattisgarh.

The other point of contention has been the purposes for which the money can be used. The fund was envisaged to be used only for “compensatory” afforestation, but the Bill before Parliament has expanded the list of works that this money can be utilised for, and includes the general afforestation programme run through the Green India Mission. Forest protection, forest management, forest and wildlife related infrastructure development, wildlife conservation, even facilitating the relocation of people from protected wildlife areas, are proposed to be made valid expenditure from this account. Critics say this will take the focus away from the prime objective of compensating for the forest cover lost to industrial or infrastructure development.

First published on: 25-05-2016 at 01:25 IST
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