Afforestation & Compensatory Afforestation Fund

It is Crucial to Conserve the Forest Along With its Diversity

Afforestation & Compensatory Afforestation Fund
Afforestation & Compensatory Afforestation Fund

A forest is recognised as an intricate ecosystem that encompasses varieties of plants, shrubs, vines and large number of tress besides algae, fungi and mosses. These are home to a wide variety of animals, birds, reptiles, insects and micro-organisms. Forest helps in maintaining the biodiversity on Earth and thus plays a crucial role in preserving a robust environment on the planet. Human activities such as urbanization, industrialization, mass migration, development along the flood plains and fragmentation or consolidation of agricultural land are the major driving force that leads to alteration in the pattern of land and significantly affects the hydrologic processes. The immense benefits that the forests provides to the society and to the diversity of life on Earth, makes it vital that they must be protected from deforestation as well as from other probable negative impacts of civilization. However, in this article we are going to discuss on afforestation and Compensatory Afforestation Fund Act 2016 which was enacted to compensate the deforestation done by planting new plants in lieu of converting forest lands for industrial purposes.

Afforestation & Reforestation

In simple terms, afforestation refers to planting of tress and plant saplings in an area where previously there was no tree cover. As human activities such as rapid urbanization, industrialization, building of roads etc. (as mentioned above) are highly responsible for deforestation, natural causes and calamities also leads to loss of forests for which afforestation or reforestation becomes a necessary initiative to be taken up by the people as well as from part of the government. Reforestation refers to a part of afforestation.  It is basically alteration of a non-forested region to a forest area through plantation of new trees and saplings. The basic difference between afforestation and reforestation is – afforestation is done in areas where previously there has been no forest cover while reforestation is restoration of an area which has been deforested. Though there are several reasons behind restoring an area through afforestation and reforestation, the most common objectives remain conservation of ecosystem and industrial-commercial purposes. Conservational afforestation & reforestation in often done to preserve the ecosystem and restore an area that has been completely destroyed because of overuse of land or in order to reduce the amount of soil erosion in a region and establish a stable and fertile soil base. On the other hand, industrial-commercial afforestation & reforestation is mainly done with the objective of maintaining a good output of wood for pulp & timber demands in some specific regions.

Drawbacks of Afforestation

Afforestation and reforestation need to be managed properly as it can bring negative impact on the environment and result in a reduction of local biodiversity, modification in biomes, introduction of non-native & potentially invasive species, reduction in stream flow, loss of revenue from agriculture. As different species have different habitat, conversion of native grasslands into a forest may lead to loss of preferred habitat for local species. Similarly, ill-managed reforestation has the potentiality of forming monoculture that reduces the diversity in plants as well as the number of available types of habitat for the forest inhabitant. Moreover, just like antique materials costs high and the value of gold increases as much as it gets old, the value of old tress are in no comparison to the new and young trees. Old grown forests with old and huge tress contain massive carbon storage capabilities. Reforesting a deforested area or afforesting a new region will take several years to gain such capabilities. Planting trees in a deforested region has the potentiality of bringing in negative impact over the original ecosystem as the soil moisture gets reduced rapidly in the area and results in habitat loss for several species.

The Compensatory Afforestation Fund – A Critical Appraisal

Forest in India comprises of diverse types of forest and reserved areas designated as Wildlife Sanctuaries and National Parks. In India, forests helps in meeting the livelihood needs of the people living in the adjoining areas and also acts as carbon sinks & regulators of water regime. Developmental and industrial projects like establishment of dams, mining, construction of industries, roadways etc. requires diversion of forest lands. Any type of project proponent be it private or public, needs to apply forest clearance from the Ministry of Environment and Forests (MoEF) before converting a forest area into an industrial land. If the Ministry approves the clearance, it also decides for the compensation for the lost forest area to be borne by the project holders. The fund collected will be utilized towards fulfilling India’s commitment to create an additional carbon sink through forest and tree cover.

The Compensatory Afforestation Fund (CAF) is a nationally constituted authority which presides over a corpus of ?66000 crore. This money is to be paid by the developers who have razed the forest land for constructing their projects. The main aim is to regenerate a forest elsewhere on a non-forest land region and compensate forest area which got destroyed due to establishment of the projects. The compensation amount to be borne by the developers depends on the economic value of goods & services that the forest would have provided if it was not razed. These include bamboo, timber, carbon sequestration, firewood, conservation of soil, seed dispersal and water recharge. The money paid by the industrialists is eventually transferred to the concerned States to accomplish the process of afforestation. Before CAF Act was introduced in 2016, Compensatory Afforestation Fund Management and Planning Authority (CAMPA) was in charge of the funds. CAF Act was introduced ‘National Compensatory Afforestation Fund’ as an independent authority for executing the funds. However, ever since the act was introduced, several questions have been raised over the guidelines for utilization of the funds and over issues such as the definition of “non-forest land” which would be used for the purpose of afforestation. The unavailability of land to accomplish afforestation process remains a huge concern for the State.

As there was no clear definition of non-forest land under the Forest Conservation Act of 1980 that addresses the issue of land under section 3.2 titled “Land for Compensatory Afforestation”, Ministry of Environment, Forest and Climate Change (MoEFCC) released a notification in November 2017 that defined non-forest land to include revenue land, scrub forest, open forest, tertiary mortgaged land and all other such categories of lands.

According to the e-governance portal for forestry & plantation, e-green watch, in Haryana the total area of the land that had been acquired for afforestation was almost half of the total land that was diverted. Similar is the situation at the country level also, the total forest land diverted was significantly greater in comparison to the land received for afforestation. This disproportion between the land diverted and land received defies the purpose of Compensatory Afforestation which is to compensate the loss ‘tree by tree’ and ‘land by land’. Moreover, since the land that is identified for Compensatory Afforestation by the department of forest is declared to be Reserved Forest or Protected Forest, transferring the land rights to the department raises concerns over the rights of the forest dwellers & tribals, guaranteed under Recognition of Forest Rights Act, 2006.

Additionally, it must be noted that the CAMPA Act passed by the government does not strictly adhere to the Supreme Court judgement. In its judgement, the Supreme Court had clearly mentioned that the fund collected for regeneration of forest and for protecting the ecology should not be treated as consolidated funds (because consolidated fund refers to all revenues received by the government as taxes & other receipts incurred in the form of borrowings & loans). However, while the CAF Act of 2016 treats the generated funds to be parked in public accounts, there is a long standing difference between the environment ministry and the finance ministry over where the cash rich fund should be kept – the Consolidated Fund of India (CFI) or the Public Account of India – and how it should be routed for allocation to the states. This dilutes the principal objective of creating a special fund & allowing divergence of funds from forestry purposes to non-forestry purposes.

The lack of available land coupled with divergence of funds for alternative activities raises several concerns over the purposeful utilization of the generated funds. After analysing different government reports and press releases, it was found that since 1980 most of the states have received less than 100 per cent of the forest land that was diverted for different industrial and infrastructural projects. According to the government’s portal e-green watch, small states such as Delhi & Goa have not received the compensation land for the forest land that was diverted.


People have the notion that they can destroy the forest, the ecosystem, the wildlife, the habitat at one place and then can recreate them again in some other place, as exemplified by the compensatory afforestation program. However, the erroneous of this concept is very clear from the poor track record of afforestation in India. Evolution of natural forests or ecosystems are dominated by the millions of years and shaped by biophysical characteristics of specific places. One should understand that it is only possible to restore a degraded ecosystem of an area or region but it is impossible to recreate a duplicate of a lost ecosystem at some alternative place.

Yes, it is correct that we cannot stop all developmental projects in order to conserve the forests. For instance, irrigation is crucial to ensure food security as building resilience to climate change. At the same time, India has set the target of creating an additional sink of 2.5-3 billion tonnes of CO2 equivalent by way of additional forest & tree cover within 2030. Therefore, just a mere compensation of money for compensatory afforestation in lieu of natural forests might not be the panacea. Constant accumulation of funds depicts that money is not an issue for the user agencies. Hence, to conserve the biodiversity, it is essential to enhance governance of natural resources, reconsider the pathways to development and make them accountable to the value of our ecosystem. Moreover, it is also essential to spread the awareness about the richness of life in our country – spreading the awareness will help in guiding our policies. Innovative polices will lead to wiser expenditure of the funds. The true success of the Compensatory Afforestation Fund Act depends on the efficient utilization of funds for addressing different causes of forest land diversion through integrated solutions. We must always remember that to save our existence on the Earth it is most essential to protect the biodiversity.


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