Introduction
The Supreme Court in ‘T.N. Godavarman Thirumulpad v. Union of India and others’ – WP No. 202/1995, dated 30.10.2002, [2002 (10) TMI 784 - SUPREME COURT OF INDIA] observed that a Compensatory Afforestation Fund can be created in which all the monies received from the user agencies towards compensatory afforestation, additional compensatory afforestation, penal compensatory afforestation, net present value of the diverted forest land or catchment area treatment plan shall be deposited.
It has also been suggested that the amount in the said fund may be utilized for-
- Artificial regeneration (Plantations),
- Undertaking assisted natural regeneration;
- Protection of forests;
- Infrastructure development;
- Wildlife protection; and
- Other related activities.
An independent system of concurrent monitoring and evaluation should be evolved and implemented to ensure effective and proper utilization of funds.
Since the Government did not constitute the Fund the Supreme Court directed to form an ad hoc Authority should be constituted till the Compensator Afforestation fund Management and Planning Authority becomes operation and directed to centrally pool the money recovered on behalf of the Authority lying in the States and Union Territories into the ad hoc Compensatory Afforestation Fund Management and Planning Authority.
In compliance of the directions of the Supreme Court ₹ 38000 crores and above collected by the State Governments and Union Territory Administration have been placed under the ad hoc authority and deposited in the nationalized banks.
The Central Government enacted the Compensatory Afforestation Fund Act, 2016 (‘Act’ for short)-
- to ensure safety, security and expeditious utilization in a transparent manner of funds accumulated with the ad hoc authority and the funds to be collected by the State Governments and Union Territory Administrations; and
- to create a National Compensatory Afforestation Fund and a National Compensatory Afforestation Fund Management and Planning Authority at the national level and-
- to create a State Compensatory Afforestation Fund and a State Compensatory Afforestation Fund Management and Planning Authority in each State and Union Territory.
Effective date
The provisions of this Act came into effect from 30.09.2018.
Compensatory afforestation
Section 2(d) of the Act defines the expression ‘Compensatory afforestation’ as afforestation done in lieu of the diversion of forest for non forestry use under the Forest (Conservation) Act, 1980.
Environmental services
Section 2 (e) of the Act defines the expression ‘environment services’ as including-
- provision of goods such as wood, non timber forest products, fuel, fodder, water and provision of services such as grazing, tourism, wildlife protection and life support;
- regulating services such as flood moderation, carbon sequestration and health of soil, air and water regimes;
- supporting such other services necessary for the production of ecosystem services, biodiversity, nutrient cycling and primary production including pollination and seed disposal.
Net present value
Section 2(j) of the Act defines the expression ‘net present value’ as the quantification of the environmental services provided for the forest area diverted and non forestry uses, as may be determined by an expert committee appointed by the Central Government from time to time in this regard.
Penal compensatory afforestation
Section 2(k) of the Act defines the expression ‘penal compensatory afforestation’ as afforestation work to be undertaken over and above the compensatory afforestation specified in the guidelines issued under the Forest (Conservation) Act, 1980, in lieu of the extent of area over which non forestry activities have been carried out without obtaining prior approval of he competent authority under the Forest (Conservation) Act, 1980.
User agency
Section 2(p) of the Act defines the expression ‘user agency’ as any person, organization or company or department of the Central Government or State Government making a request for diversion or de-notification of forest land for non forest purpose or using forest land for non forest purpose in accordance with the provisions contained in the Forest (Conservation) Act, 1980 and the rules made and guidelines issued, there under.
National Fund
With effect from 30.09.2018 the Central Government established a special Fund called the ‘National Compensatory Afforestation Fund’ (‘National Fund’ for short) under the control of the Central Government and managed by the National Authority.
All the monies placed under the ad hoc Authority shall be transferred to the National Fund.
Source of the National Fund
- by each State 10% of the State Funds on yearly basis;
- grants-in-aid received, if any, by the National Authority;
- any loan taken or any borrowings made by the National Authority;
- any other sums received by the National Authority by way of benefaction, gift or donations.
Disbursement and utilization of the National Fund
All the monies available in the National Fund shall be disbursed and utilized in the following manner-
- 90% of all the monies collected by a State shall be transferred to the State Fund;
- the balance 10% of the money and the interest accrued thereon shall be utilized for meeting-
- the non recurring and recurring expenditure for the management of the National Authority including the salary and allowances payable to its officers and other employees;
- the expenditure incurred on monitoring and evaluation of works executed by the National Authority and each State Authority;
- the expenditure incurred on specific schemes approved by governing body of the National Authority.
Scheme
The ‘scheme’ includes any institute, society, centre of excellence in the field of forest and wildlife, pilot schemes, standardization of codes and guidelines and such other related activities for the forestry and wildlife sector.
National Authority
With effect from 30.09.2018 the Central Government constituted a National Authority called the National Compensatory Afforestation Fund Management and Planning Authority to manage and utilize the National fund for the purposes of this Act. The National Authority shall consist of a governing body and assisted by-
- an executive committee;
- monitoring group; and
- administrative support mechanism.
Governing Body
The governing body of the National Authority shall consist of the following-
- Minister for Environment, Forest and Climate Change, Government of India – Chairman, ex officio;
- Secretaries of the Ministries dealing with Environment, Forest, Climate change, Finance (Expenditure), Rural Development, Land Resources, Agriculture, Panchayati Raj, Tribal Development, Science, Technology, Space and Earth sciences and Chief Executive Officer, National Institution for Transforming India Ayog, Government of India – Members, ex officio;
- Director General of Forests and Special Secretary, Ministry of Environment, Forest and Climate Change, Government of India – Member, ex officio;
- Additional Director General of Forests (Forest Conservation), Ministry of Environment, Forest and Climate Change, Government of India – Member, ex officio;
- Additional Director General of Forests (Wildlife), Ministry of Environment, Forest and Climate Change, Government of India – Member, ex officio;
- Mission Director, National Mission for a Green India, Ministry of Environment, Forest and Climate Change, Government of India – Member, ex officio;
- Financial Adviser, Ministry of Environment, Forest and Climate Change, Government of India – Member, ex officio;
- 5 Principal Chief Conservator of Forests, not more than one from each of the 10 regions, to be nominated by the Ministry of Environment, Forest and Climate Change, Government of India on rotation basis for a period of 2 years, at a time – Members, ex officio;
- Inspector General of Forests (Forest Conservation), Ministry of Environment, Forest and Climate Change, Government of India – Member, ex officio;
- 5 experts, one each from environmentalists, conservationists, scientists, economists and social scientists appointed by the Central Government for a period of 2 years subject to note more than 2 consecutive terms – Members.
The Central Government may appoint an officer of the rank of an Additional Director General of Forests and Chief Executive Officer of the National Authority who shall be the Member-Secretary of the governing body and the executive committee of the National Authority.
Executive Committee
The executive committee of the National Authority shall consist of the following from the Ministry of Environment, Forest and Climate Change, Government of India-
- Director General of Forests and Special Secretary – Chairperson, ex officio;
- Additional Director General of Forests (Forest Conservation) – Member, ex officio;
- Additional Director General of Forests (Wildlife) – Member, ex officio;
- Mission Director, National Mission for a Green India – Member, ex officio;
- Financial Adviser – Member, ex officio;
- Head of the regional officers – Members, ex officio;
- Inspector General of Forests (Forest Conservation) – Member, ex officio;
In addition to the above the following members are appointed-
- A professional ecologist, not being from the Central Government, to be appointed by the Central Government – Member;
- 3 experts, one each in the fields of forestry, tribal development, forest economy development, not being from the Central Government, to be appointed by the Central Government – Members;
- Chief Executive Officer of the National Authority – Member – Secretary.
Monitoring group
The monitoring group shall consist of 6 experts in the field of environment, economics, wildlife, forest, remote sensing and geographical information system and social sector and the Director General, Forest Survey of India, Ministry of Environment, Forest and Climate Change, Government of India.
The following officers are to be appointed by the National Authority to assist the executive committee in performance of its functions and powers under the Act-
- Joint Chief Executive Officer of the rank of Inspector General of Forests;
- Financial Adviser and Chief Accounts Officer of the rank of Director in the Government of India; and
- Deputy Chief Executive Officers of the rank of Deputy Inspector General of Forests.
The tenure of the above members is 5 years.
Disqualifications
A person shall be disqualified for being appointed as a member of the National Authority, executive committee, if he-
- has been convicted and sentenced to imprisonment for an offence which, in the opinion of the Central Government, involves moral turpitude; or
- is an undischarged insolvent; or
- is of unsound mind and stands so declared by the competent court; and
- has been removed or dismissed from the service of the Government or organization or undertaking owned by the Government; or
- has, in the opinion of the Central Government, such financial or other interest in the National Authority as is likely to affect the duties discharged by him of his function as a member.
Powers and functions of the National Authority
The governing body of the National Authority shall-
- formulate broad policy framework for functioning of the National Authority and State Authorities as may be notified by the Central Government;
- approve the annual report and audited accounts of the National Authority;
- review reports on decision taken by executive committee and monitoring group of the National Authority including investing decisions;
- approve the proposal for the schemes;
- approve the proposal for creation of posts in the National Authority subject to prior permission of the Central Government;
- provide a mechanism to State Authorities to resolve issues of inter-State or Center-State character;
- formulate such procedures for delegation of financial and administrative powers of the National Authority and State Authorities asmay be notified by the Central Government.
The governing body shall meet at least once in six months at such places and shall observe such rules and procedures in regard to transaction of business at its meeting, including the quorum thereat, as may be prescribed.
Powers and functions of executive committee
The executive committee of the National Authority shall-
- approve within 3 months from the date of receipt, annual plan of operations of the State Authorities, with such amendments as it deems fit and proper;
- formulate proposals for schemes;
- execute schemes;
- deploy staff on contract or on deputation basis to the posts in the National Authority;
- formulate proposals for creation of posts in the National Authority at the level of Assistant Inspector General of Forests and other officers;
- invest surplus amounts available in the National Fund;
- execute other day-to-day work in respect of receipt of amounts in the National Fund;
- maintain books of account and such other records;
- facilitate scientific, technological and other assistance that may be required by the State Authorities;
- present its decisions to the governing body of the National Authority for information;
- maintain and update a public information system on the National Authority and present all information on its transaction in the public domain;
- undertake any other work as may be assigned by the governing body of the National Authority or the Central Government from time to time
The executive committee shall meet at least once in every three months.
Functions of monitoring group
The monitoring group shall-
- evolve independent system for concurrent monitoring and evaluation of the works implemented in the States and Union territories utilizing the funds released by the National Authority and State Authorities to ensure effective and proper utilization of funds by utilizing the services of the regional offices, of the Central Government in the Ministry of Environment, Forest and climate change;
- inspect and undertake financial audit of works executedby utilizing the fund released by the National Authority and State authorities and Union territories;
- Devise measures for transparency and accountability.
Budget
The National Authority shall prepare its budget for the next financial year showing estimated receipts and expenditure of the National Authority and forward the same to the Central Government. The National Authority shall adopt financial regulation and procedures, n particular the procedure for drawing up and implementing the budget of the National Authority as may be prescribed.
Investment of Funds
The National Authority may invest its funds, including any reserve fund, in the securities of the Central Government and in Scheduled Banks in such manner as may prescribed. The grants received from the Central Government shall not be invested and shall be utilized for the purposes and in the manner attached to it.
Accounts and Audit
The National Authority shall maintain proper accounts and other relevant records and prepare an annual statement of accounts in such form as may be prescribed in consultation with C&AG. The accounts of the National Authority shall be audited by the C&AG at such intervals. The Central Government shall have the power to conduct the special audit or performance audit of the National Fund of the National Authority through the C&AG.
Annual report
The National Authority shall prepare, its annual report giving a full account of its activities during the previous financial year and forward a copy thereof to the Central Government in such form and at such time, for each financial year, as may be prescribed. The Annual report shall provide for-
- the summary of monitoring and evaluation of activities undertaken from amounts released from the National Fund and State Funds during the year;
- the summary of specific schemes executed during the year;
- the amount of money received and expended.
The Central Government shall cause the annual report and audit report together with a memorandum of action taken on the recommendations contained thereon to be laid as soon as may be after the reports are received before each House of Parliament.
