The Compensatory Afforestation Fund Act, 2016.
The Compensatory Afforestation Fund Act, 2016
1. Introduction
The Compensatory Afforestation Fund Act, 2016 (CAF Act) was enacted to provide for the establishment of a Compensatory Afforestation Fund for the purpose of promoting afforestation activities as a way to compensate for forest land diverted to non-forest purposes. This Act aims to ensure proper and timely utilization of funds collected for compensatory afforestation, which were previously lying unutilized or misutilized.
2. Background
When forest land is diverted for non-forest purposes such as infrastructure projects, industry, or mining, the user agency is required to compensate by afforesting an equivalent area of degraded forest land or other suitable land. This compensatory afforestation has been mandated under forest conservation laws.
Before the CAF Act, funds collected for compensatory afforestation were deposited with the State Governments but often remained unutilized due to administrative delays and lack of proper mechanisms.
3. Objectives of the Act
Establish National and State-level Compensatory Afforestation Funds.
Provide a dedicated and transparent mechanism for utilizing compensatory afforestation funds.
Promote afforestation and regeneration activities on degraded forest land.
Monitor and ensure timely utilization of funds.
Reduce procedural delays in environmental clearance and forest diversion projects.
4. Key Provisions
| Provision | Details |
|---|---|
| Establishment of Funds | National Compensatory Afforestation Fund (NCAF) and State Compensatory Afforestation Funds (SCAF). |
| Fund Sources | Money deposited by user agencies for compensatory afforestation, penal compensations, fines, etc. |
| Management of Funds | Funds managed by National Authority and State Authorities constituted under the Act. |
| Utilization of Funds | Funds to be used for afforestation, regeneration, forest protection, wildlife protection, eco-restoration. |
| National Authority | The Central Government constituted the National Compensatory Afforestation Fund Management and Planning Authority (NCAFMPA). |
| State Authorities | State Governments constituted State-level Authorities to manage funds. |
| Transparency and Accountability | Annual reports, audits, and public disclosure of fund utilization mandated. |
| Penalties for Misuse | Strict provisions for penalizing misappropriation or misuse of funds. |
5. Structure of the Authorities
National Authority: Responsible for overall management of the National Fund, approval of projects, monitoring, and coordination.
State Authorities: Responsible for managing the State Funds, preparation of management plans, implementation, and reporting.
6. Significance
Provides a dedicated mechanism to ensure compensatory afforestation is done effectively.
Helps in better ecological balance by restoring degraded forests.
Encourages sustainable development by integrating forest conservation with developmental needs.
Enhances transparency and accountability in environmental governance.
Relevant Case Laws
1. T.N. Godavarman Thirumulpad v. Union of India (1996)
Issue: The Supreme Court emphasized the need for afforestation and the proper use of compensatory afforestation funds.
Significance: The Court in its various orders highlighted the mismanagement of compensatory afforestation funds and directed the creation of a mechanism for proper management—leading to the genesis of the CAF Act.
2. Godavarman Case (Writ Petition (Civil) No. 202/1995) — Multiple Orders
Issue: Delay and misutilization of compensatory afforestation funds.
Judgment: The Supreme Court mandated the establishment of a dedicated Compensatory Afforestation Fund and a monitoring authority to ensure proper use of funds.
3. Union of India v. Association for Protection of Democratic Rights (2019)
Issue: Monitoring and utilization of funds under CAF Act.
Judgment: The Court reiterated the importance of transparency in managing the compensatory afforestation funds and directed States to submit detailed utilization reports.
Summary
The Compensatory Afforestation Fund Act, 2016 provides a legal and institutional framework to:
Ensure that compensatory afforestation is undertaken efficiently and effectively.
Maintain ecological balance by restoring forest areas lost to development.
Promote transparency and accountability in the use of afforestation funds.
Facilitate sustainable development by harmonizing infrastructure growth and environmental conservation.
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