Compensatory Afforestation Fund Act, 2016

What is Compensatory Afforestation Fund

  • CAF has the provision to create a national fund with contributions from user agencies—any person, organisation, company or department of the Centre or state government making a request to divert or de-notify forest land for non-forest purpose.
  • Centre is yet not ready with the rules to implement the Compensatory Afforestation Fund Act, 2016


  1. Violates tribal rights regime
  • Compensatory Afforestation Fund Act, 2016 (CAF)gravely violates the constitutional and legal rights as well as livelihoods of crores of adivasis and forest dwellers in India, under Article 300A of the Constitution, Panchayat (Extension to Scheduled Areas) Act, 1996 (PESA) and the Forest Rights Act, 2006 (FRA).

     2.Deforestation enhanced

  • Tribals criticised the act for creating a perverse incentive to accelerate deforestation rather than prevent it.
  • It is debatable whether the Act, with the disbursal mechanism through national and State funds that it mandates, is a sound remedy for loss of rich forests that continues to occur because of developmental and biotic pressures.
  • The evidence on compensatory afforestation in a big project such as the Sardar Sarovar Dam, for instance, is not encouraging.

    3.Use of land is not defined clearly

  • There is no clarity on the plantation process. If land is diverted in one area, compensatory afforestation can be done somewhere far away.
  • November 8 guidelines of the Ministry of Environment and Forest on creation of land banks for compensatory afforestation are vague and can include lands on which forest rights aren’t settled.

    4.Loss of biodiversity

  • The monoculture plantations that came up as afforestration are having low biodiversity value.
  • Replacing a natural forest with a plantation does not really serve the cause of nature, wildlife, or the forest-dwelling communities who depend on it, because of the sheer loss of biodiversity.
  • It is worth pointing out that the method used to calculate the net present value of forests, taking into account all ecosystem services they provide, is far from perfect.

Way forward

  1. Management of fund
  • Ensure that all accumulated Compensatory Afforestation funds are democratically managed and administered by transferring to gram sabhas
  • What the Centre needs to do is to enable independent audit of all connected programmes, in order to sensibly deploy the financial resources now available

     2.Decentralisation of powers to undertake works out of the fund

  • All activities with the fund must be done with free, prior and informed consent of gram sabhas.

    3.Preserving biodiversity

  • Though, diversion of forests for non-forest use seems inevitable to some degree, the task is to make an assessment of suitable lands, preferably contiguous with protected areas that can be turned over for management to a joint apparatus consisting of forest department staff and scientific experts.
  • There is immense potential to augment the services of forests through a careful choice of plants and trees under the afforestation programme.

Question for Answer Writing

Q: What do you understand by compensatory afforestation? Discuss the salient features of the Compensatory Afforestation Fund Act, 2016.

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