Policy Update
Sandra Menon
Introduction
The development path taken by India for many decades has been plagued by a structural contradiction; that the forest land required for mining, road-building, power transmission, and industry projects was also land that had been pledged to protection both domestically through forest laws and internationally through its Nationally Determined Contribution for sequestration of 2.5 to 3 billion tons of carbon dioxide equivalents by 2030.
In an attempt to overcome this issue, the Forest (Conservation) Act, 1980 provided that whenever an agency diverting such forest land for non-forest purpose should pay for compensatory afforestation of similar area along with the payment of net present value of forest thus diverted. Theoretically, this was expected to be a self-sustaining mechanism for forest restoration. However, for almost a decade and a half, the funds collected under the scheme remained unutilized both at the level of states and a makeshift central government authority.
The Compensatory Afforestation Fund Act, 2016 has been the legislature’s answer, creating a statute framework that provides for the Compensatory Afforestation Fund Management and Planning Authority (CAMPA), wherein there is the creation of the National Compensatory Afforestation Fund within the Public Account of India and a State Compensatory Afforestation Fund in the Public Account of all States/Union Territories.
The Act and rules thereof were put into force in 2018, more than seven years ago now. This article looks at the actual functioning of the governance of CAMPA funds since that time, based on audits done by the Comptroller and Auditor General of India, the 2025 review of the Supreme Court’s directive to be carried out by the Central Empowered Committee, and disclosures by Parliament itself, to see where the Act has achieved its objective of providing a more certain finance source for afforestation.
Background
The history of the creation of CAMPA is linked to the ongoing litigation on the conservation of forests by the Supreme Court of India in the case of T.N. Godavarman Thirumulpad v. Union of India. In 2002, the Court ordered the Centre to set up a body for managing the resources collected from the user agencies for compensatory afforestation, and, in April 2004, the Ministry of Environment and Forests issued a directive establishing the CAMPA on this basis. However, the said arrangement lacked any legal basis. According to a report by the CAG in 2013, a substantial amount collected from the proponents over the years was not spent at all.
The Compensatory Afforestation Fund Bill was presented to the Lok Sabha in May 2015 by the then Minister of Environment, Forest and Climate Change, was referred to the Parliamentary Standing Committee on Science and Technology, Environment and Forests from May 2015 to February 2016, was passed by the Lok Sabha on 3 May 2016 and by the Rajya Sabha on 28 July 2016, and got presidential assent on 3 August 2016 and came into force as Act No. 38 of 2016.
The Act and the Compensatory Afforestation Fund Rules, 2018 have been notified together, and the Act actually came into effect on 30 September 2018. The moment the Act and the Rules came into force, an accumulated corpus in tens of thousands of crores of rupees, which had been accumulated through the ad hoc system, could be released to the states in accordance with the Act, ending the long ad hoc era of the sector.
Functioning
A two-tier institutional framework is created by the Act. National CAMPA is at the highest level that lays down the guidelines, approves the Annual Plan of Operation of the states, keeps track of the utilisation of funds, and holds back 10 percent of total money deposited into the compensatory afforestation account in the country. 90 percent goes to the State CAMPA, which is in the state or Union territory from which the forest has been diverted, in the Public Account of that state, and used as per its Annual Plan of Operation as per Rule 39 of the CAF Rules, 2018.
The funds receive money from various sources associated with individual instances of forest clearance. Such sources include the cost of compensatory afforestation per se, additional compensatory afforestation if necessary, the Net Present Value of the diverted forest land, the cost of the catchment area treatment plan, and other recovery amounts that are specific to individual projects recovered as per the Forest (Conservation) Act, 1980.
According to the Act, the amount can be used for various purposes in addition to planting trees: assistance in natural regeneration of the forest, protection of the existing forests, forest infrastructure development, conservation and management of wildlife, relocation of villages out of the protected forests, prevention of human-wildlife conflicts, and capacity-building, along with the Green India Programme. All State Authorities’ financial statements must undergo an annual audit conducted by the Comptroller and Auditor General.
Performance
As for the specific issue of whether the money is making its way to the states today, CAMPA has made progress beyond the pre-2016 scenario. The parliament was informed that ₹48,477.77 crore had been transferred to 31 states and UTs until the end of January 2021, and through independent analyses of further parliamentary records, the total transfers up to January 2023 were estimated to be around ₹51,770 crore, and Odisha and Madhya Pradesh were the biggest beneficiaries.
Whether this amount is used as planned or not, is another question altogether. According to the data generated by the Indian parliament, the aggregate sum of Annual Plans of Operation approved for the period 2019-20 to 2021-22 amounted to only around 45 percent of the amount already allocated to the States in that period.
A more recent and finer-grained study by the Central Empowered Committee appointed by the Supreme Court revealed that as of July 2025, between the fiscal years 2019-20 and 2023-24, the National Authority has approved an expenditure of ₹38,516 crore under the state annual plans, and the States released ₹29,311 crore to their Forest Departments, of which only ₹26,001 crore, or 67.5 per cent of the approved expenditure, was utilized. As seen from Table 1 below, the above-mentioned figures indicate large differences among the States, where Manipur and Andhra Pradesh utilized all the funds allocated to them, whereas Delhi utilized only 26.9 per cent of the allocated amount.
| State/UT | Share of Released Funds Utilised (%) |
| Manipur | 100.0 |
| Andhra Pradesh | 100.0 |
| Sikkim | 97.7 |
| Karnataka | 96.6 |
| Chhattisgarh | 95.0 |
| Odisha | 87.9 |
| West Bengal | 81.1 |
| Tamil Nadu | 67.9 |
| Haryana | 57.4 |
| Delhi | 26.9 |
| All-India (₹29,311 cr released / ₹26,001 cr utilised) | 67.5 |
Source: Central Empowered Committee report data, as reported by PTI/ETV Bharat (2025) and Drishti IAS (2025); figures cover the period 2019-20 to 2023-24.
The performance results in physical afforestation are equally relevant but different from those discussed above. Nationally, India has performed compensatory afforestation of 1,78,261 hectares out of a targeted 2,09,297 hectares for 2019-20 to 2023-24. The performance is 85 per cent of the targeted afforestation.
Full targets were achieved by Gujarat, Chandigarh, Mizoram, and Madhya Pradesh whereas only 22.3 per cent was attained in Meghalaya, 32.3 per cent in Tamil Nadu and 39.2 per cent in West Bengal. Andhra Pradesh can be considered an interesting case where the utilization of funds allocated to it is 100 per cent but the afforestation targets are 40.1 per cent. The survival rate of plants shows even worse results. The Comptroller and Auditor General (CAG) audit found a survival rate of only 33.51 per cent in Uttarakhand compared to the 60-65 per cent recommended by the Forest Research Institute.
Impact
The major accomplishment of CAMPA is in transforming an unreliable and often disputed pot of money into an assured flow of finances that can be budgeted for on an annual basis, which was impossible to achieve prior to 2016. This fund has helped the states with the biggest allocations, namely Odisha, Madhya Pradesh, Chhattisgarh, Jharkhand, and Maharashtra, build more forest-related infrastructure, anti-poaching facilities, and conduct wildlife management activities, besides creating forestry employment opportunities during the off-season in some of the states’ districts where forests are very important sources of livelihood.
This stands in contrast to CAG performance audits of CAMPA projects repeatedly showing a similar problem of fund diversion and delays rather than misuse. According to the audit of Uttarakhand that covered 2019-2022, ₹13.86 crore has been spent on goods which were not related to afforestation like office stationery and construction of offices, 37 afforestation projects delayed by more than eight years causing financial escalation of ₹11.54 crore, and more than 1,200 hectare area declared suitable for plantation by the Divisional Forest Officers, but on verification, the site conditions were not met by these officers.
There was also an audit in Odisha in early 2025, highlighting CAMPA’s low plantation survival rate and inadequate maintenance after plantation, according to Mongabay India. But perhaps, the most significant consequence affects the community rather than accounting records: CAMPA plantation sites are often situated on lands where forest communities traditionally practice their rights.
Reports from Mandikhoh village of Madhya Pradesh and Lower Dibang Valley in Arunachal Pradesh talk about planting on lands that have been traditionally used by communities for grazing animals and harvesting non-timber forest produce, and in the latter, without even informing the Idu Mishmi tribes with their customary rights over those lands, thus bringing CAMPA into confrontation with the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006.
Emerging Issues
There are certain recurring structural problems that are not mere aberrations but are observed regularly in various states as well as in different audit cycles. One of the most elementary problems is the lack of an ongoing land bank of non-forest land which was observed by the Uttarakhand CAG audit wherein it was noticed that the Forest Department has not established such a land bank so that the process of forest conservation proposals could be fast-tracked and in 363 such instances where nearly 900 hectares of diverted forest lands were involved, the competent authority had not yet notified the compensatory afforestation lands as being reserved or protected forests even after years of diversion having been made in these cases.
The Central Empowered Committee’s 2025 report highlights other procedural reasons for underutilization which include delays in submission of annual plans by states, delayed release of sanctioned funds and lack of CAMPA offices in various states.
The third point is conceptual in nature. Since the act relies greatly on hectares planted and funds allocated, conservationists and political ecologists have pointed out that the Act creates an incentive for forest departments to undertake monoculture planting of trees on grasslands and pasture lands which forest departments label as degraded, but actually already functioning ecologically and actively utilized by communities, rather than restoring the specific kind of forest that had been destroyed.
The rights-based criticism which has come along with CAMPA since its Bill form in 2015 is that there is no legal obligation to seek the consent or even consultation from the gram sabhas of communities whose customary or Forest Rights Act claims fall within the ambit of the proposed plantation sites. Lastly, although the act demands CAG audit of every State Authority each year, the reoccurrence of similar problems, such as lapses, diversion of funds, delayed afforestation, unverified land, and survival monitoring, indicates that the audit recommendations are not leading to any sustained correction in the states.
Way Forward
Closing such gaps will involve improving implementation and not necessarily rewriting the CAMPA Act itself. The state governments must create land banks of non-forest land that have been suitably assessed before diverting such lands to the plantation projects. This assessment must come from an independent authority and not from the Divisional Forest Officer that will conduct the plantation, as suggested by the CAG.
Release of funds for every next tranche of CAMPA can be contingent on the utilization and survival rate of the previous round of plantations rather than just being linked to the approved Annual Plan of Operation. States that still depend on the general forest department to execute CAMPA can do with specific CAMPA offices and personnel. This will be useful in solving the mismatch between fund release and planting seasons that the Central Empowered Committee pointed out.
On the issue of rights and consent, it seems that if the statutory requirement of consultation and consent for plantation projects was to be expanded to gram sabhas, where any proposals for CAMPA plantations overlap with lands classified or claimed as forest rights under the Forest Rights Act, it would help CAMPA in its implementation go along with central laws instead of going against them, and it might also lessen the conflicts that have emerged with respect to a few state-level plantations.
Survival audits by an independent body at set intervals after plantation, instead of mere self-certifications by the departments, would provide a reliable way to measure whether afforestation is being successful or not. Finally, disclosure in real time of state-wise Annual Plans of Operations, fund disbursements, and utilisation, beyond that already made in Parliament, would provide for greater tracking of the use of CAMPA funds for the forest diversion that led to such disbursement.
References
Arunachal Times. (2026). Misuse of CAMPA funds and illegal land acquisition alleged in Lower Dibang Valley.
Comptroller and Auditor General of India. (2024). Report No. 5 of 2024 – Performance audit on the Compensatory Afforestation Fund Management and Planning Authority, Government of Uttarakhand.
Deccan Herald. (2019). Karnataka gets Rs 1,350 cr green fund from Centre.
Deccan Herald. (2025). CAG cites loopholes in management of compensatory afforestation planning body’s funds.
Drishti IAS. (2025). Central Empowered Committee report on CAMPA.
ETV Bharat / PTI. (2025, July 28). India raised compensatory afforestation over 1.78 lakh ha from 2019-20 to 2023-24: Report.
Factly. (2023). Data: only 27% of CAMPA funds utilized between 2019-20 and 2021-22.
Ministry of Environment, Forest and Climate Change, Government of India. (2021). Lok Sabha Unstarred Question No. 2940 – Funds allocated under CAMPA.
Mongabay India. (2025, January). Can CAMPA compensate for the loss of forest land?.
PRS Legislative Research. (2016). The Compensatory Afforestation Fund Bill, 2015 – Bill summary.
Scroll.in. (2023). How Adivasis in an MP village are being dispossessed, first for development, now for afforestation.
UnderStand UPSC. (2026). Compensatory Afforestation Fund (CAF) Act, 2016.
About the Contributor
Sandra Menon is a Research and Editorial Intern at IMPRI and a first-year Master’s student in Public Policy at M.O.P. Vaishnav College for Women, Chennai. Her academic interests lie in public policy and governance.
Acknowledgement
The author extends sincere thanks to the IMPRI team for their guidance.
Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.
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Amrutha Lahari Kolluru & Pritha Chowdhury
