Written by Talent KAS

Related Topics: Environment, CAF Act 2016

Why in News

  • Union Environment Ministry has transferred ₹47,436 crore to 27 States for afforestation.
  • These are long-pending dues, part of the Compensatory Afforestation Fund (CAF).

What is CAF?

  • CAF is a ₹54,000 crore tranche that has been collected as environmental compensation from industry, which has razed forest land for its business plans.
  • The Compensatory Afforestation Fund Act (CAF), 2016 has a provision to collect funds from user agencies—any person, organisation, company or department of the central or state government making a request for diversion or de-notification of forest land for non-forest purposes.

Economic Value

  • The amount to be paid by industry depends on the economic value of the goods and services that the razed forest would have provided.
  • These include timber, bamboo, firewood, carbon sequestration, soil conservation, water recharge, and seed dispersal.
  • Industrialists pay this money and this is eventually transferred to the States concerned to carry out afforestation.

Reason for Delay in Transfer

Only a fraction of this corpus had actually been disbursed to States, due to the lack of a legal framework and instances of States using it for non-forestry purposes.


  • The CAF Act 2016, which came into being more than a decade since it was devised, established an independent authority called Compensatory Afforestation Fund Management and Planning Authority (CAMPA) to execute the fund.
  • Centre would use geographic tagging technology to keep a tab on whether States were using their allotted funds appropriately.

How CAF will be used?

  • The Fund will be used as per provisions of the CAF Act and Rules.
  • 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.
  • It cannot be used for payment of salary, travelling allowances, making buildings and buying office equipment for forest officers.

Share of States

  • Odisha, the top recipient of funds, got nearly ₹6,000 crore followed by Chhattisgarh and Madhya Pradesh with ₹5,791 crore and ₹5,196 crore respectively.
  • Kerala got the least with ₹81.59 crore.


  • It is expected that all State Governments will utilize this fund for the enhancement of forestry activities to achieve the objectives of the Nationally-Determined Contributions (NDCs).
  • The objective of the NDCs is to increase its forest and tree cover.
  • This will help in an additional carbon sink equivalent to 2.5 to 3 billion tonnes of carbon dioxide by the year 2030.


  • The idea of compensatory afforestation, which essentially means planting trees to compensate for undertaking an activity that leads to deforestation, has its roots in the Forest (Conservation) Act, 1980.
  • The ad hoc CAMPA body was created by the order of the Supreme Court on July 10, 2009.
  • It was created as National Advisory Council under the chairmanship of the environment minister for monitoring, technical assistance and evaluation of compensatory afforestation activities.
  • Till 2016, when the CAF Act was finally passed by the Parliament, compensatory afforestion and the fund collection was happening under the Compensatory Afforestation Fund guidelines released by MoEF in 2009.
[Source: The Hindu, Down To Earth]

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