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Compensatory Afforestation

Compensatory Afforestation

Union Environment Ministry has finally released a whopping ₹47,436 crore to 27 states for tree planting efforts. These funds, which have been pending for quite a while, are part of the CAF. This money has been accumulated over almost a decade as compensation from industries for environmental purposes. The transferred funds are extra support for the states, beyond their regular budgets.

What is Compensatory Afforestation?

  • CA refers to the process of planting trees and engaging in related activities to make up for the loss of forest land that has been redirected for non-forest uses.
  • According to the Forest Conservation Act of 1980, whenever forest land is used for non-forest activities like mining or industry, the project developer must find an equivalent area of non-forest land. Additionally, they are obligated to fund the planting of forests on this identified non-forest land. If suitable non-forest land is not available, the developer is required to plant trees on an area twice the size of degraded forest land.

Compensatory Afforestation Fund

  • In 2016, the central government passed the Compensatory Afforestation Fund Act to better handle funds collected for compensatory afforestation.
  • Prior to this, an ad hoc organization called Compensatory Afforestation Fund Management and Planning Authority (CAMPA) was in charge of managing these funds.
  • The related rules for the Act were officially notified in 2018.

Key Provisions of  Compensatory Afforestation Fund Act, 2016

  • The government set up a National Compensatory Afforestation Fund and a State Compensatory Afforestation Fund to manage money for specific purposes.
  • The National Fund and each State Fund will get payments for compensatory afforestation, the net present value of forests, and other project-related payments.
  • Out of these funds, the National Fund will receive 10%, while the State Funds will get the remaining 90%.
  • The main use of these funds is for activities like afforestation to make up for lost forest cover, restoring the forest ecosystem, protecting wildlife, and developing infrastructure.
  • To oversee these funds, the government created the National and State Compensatory Afforestation Fund Management and Planning Authorities. Their role is to manage and plan the use of the National and State Funds.


  • The Compensatory Afforestation Fund Management and Planning Authority (CAMPA) has so far disbursed ₹48,606 crores to 32 States.
  • Chhattisgarh and Odisha have had the maximum amount transferred to them, followed by Jharkhand and Maharashtra.

Read Also: National Investment and Infrastructure Fund 

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