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Compensatory Afforestation

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  • Last Updated : 02 Jul, 2022
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The process of planting trees and developing land into a forest area is called afforestation. Compensatory Afforestation is the process of indirect afforestation activities that aim to compensate for the destruction of forest land done to certain activities that contradicts the purpose of afforestation. The process works through certain guidelines that state in case of diversion of forest land for non-forest use for any project purpose, the project authorities have to provide funds to the forest department of the respective state to compensate for this loss of forest land. The funds will be used for afforestation of any other non-forest land of equal area. In case of non-availability of suitable land for forest –use, the fund should be used to improve a degraded forest land of double the size.

Objectives of Compensatory Afforestation:

The objective of compensatory afforestation is to collect adequate compensation from the agency which uses the forest land for mining or industry purposes. The compensation is meant for the regeneration of new forest areas or improvement of decaying forest areas to maintain the ecological balance and enhance climate conditions. Various development projects like the establishment of industry, mining, erection of dams, and road construction lead to the diversion of forest lands. The project may be undertaken by either government or private enterprises that need to apply to the Ministry of Environment, Forest and Climate Change for approval for the conversion of forest land. The competent government authority will review the application and if clearance is given, the authority will decide on the adequate compensation plan for the destroyed forest land and process the formalities. 

Government Initiative For Compensatory Afforestation:

The Compensatory Afforestation Fund Management and Planning Authority (CAMPA) was formed with the authority and responsibility for promoting and executing compensatory afforestation through the regeneration of forest land as a means to compensate for forest lands diverted and used for non-forest activities. One of the prerequisites for compensatory afforestation is the prior approval that is required for the conversion of forest land for other activities. It ensures that necessary actions are taken to compensate for the land and natural resources. The CAMPA undertakes various activities like preservation of natural forests, regeneration of diminishing forest reserves, and creation of suitable habitats for wildlife and other creatures. 

CAMPA working at the state level looks after the proper implementation of the compensatory afforestation process through monitoring, assistance, fund allocation, and evaluation of the progress. The funds to be recovered from the user agencies depend on the factors taken into consideration by the state forest department. The agencies need to compensate according to the type of forest, its location, and the varied species that the forest area provides habitat for. CAMPA is responsible for technical assistance and regulatory guidance to execute the compensatory afforestation process successfully.

The Procedure of Compensatory Afforestation:

The scheme of compensatory afforestation includes the following steps:

  • Identification of non-forest land or degraded forest suitable for compensatory afforestation
  • Engagement of agencies responsible for afforestation
  • Define work schedules in detail for compensatory afforestation
  • Allocate funds as per the cost estimates and ensure proper utilization of funds
  • Prepare an organized monitoring and review system

Regulatory Steps For Compensatory Afforestation:

The fund management and allocation are important to implement the compensatory afforestation effectively producing desired results. The Compensatory Afforestation Fund Management Bill was introduced in 2016 to define a structure of fund management between centre and state. The bill states that the central government will provide funds to carry out afforestation activities at the state level. The funds have to be used in dealing with various activities related to the afforestation process which include forest management, wildlife management, relocation of villages and tribes from the area, maintaining human-animal interaction, generating socio-economic solutions, and developing awareness and involvement. 

The state of Andhra Pradesh and Madhya Pradesh maintains a leading position in the utilization of government funds followed by Maharashtra, Jharkhand, and Odisha. As per the Forest Conservation Act 1980, the land for compensatory afforestation has to be in proximity to the protected forest areas of that district or any part of the state. If the land is not available in any part of the state or union territory, the fund to be given by compensating agency should be proportional to the development of twice the area of diverted forest land.

Important Government Data:

  • India’s total forest cover is around 24% of the country’s total geographical area.
  • The Compensatory Afforestation Fund (CAF) Management Act was passed in 2016
  • The Center gives 90% of the CAF money to the states and retains 10% for itself. India plans to increase forest area to 33% of the total geographic area by 2030.
  • In 2019, 68 developmental projects were carried out by diverting forest areas.


The forest coverage in a country contributes greatly to the ecological balance by maintaining biodiversity and natural growth of flora and fauna, and creatures. It is also a great resource to address adverse climatic changes and pollution. So maintaining an optimum level of forest coverage is necessary along with the development activities and compensatory afforestation is a major step in this regard. 


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