AS INTRODUCED IN LOK SABHA

Bill No. 153 of 2015

THE COMPENSATORY AFFORESTATION FUND BILL, 2015

——————
ARRANGEMENT OF CLAUSES
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CHAPTER I
PRELIMINARY
CLAUSES
1. Short title, extent and commencement.
2. Definitions.

CHAPTER II
ESTABLISHMENT, MANAGEMENT AND UTILISATION OF NATIONAL COMPENSATORY
AFFORESTATION FUND AND STATE COMPENSATORY AFFORESTATION FUNDS
3. Establishment of National Fund.
4. Establishment of State Fund.
5. Disbursement and utilisation of National Fund.
6. Disbursement and utilisation of State Fund.
7. Accounting procedure.

CHAPTER III
CONSTITUTION OF NATIONAL AUTHORITY AND S TATE AUTHORITIES
8. Constitution of National Authority
9. Executive committee and monitoring group of National Authority.
10. Constitution of State Authority.
11. Steering committee and executive committee of State Authority.
12. Term of office and conditions of service of members.
13. Disqualifications.

CHAPTER IV
POWERS AND FUNCTIONS OF NATIONAL AUTHORITY AND STATE AUTHORITIES
14. Powers and functions of National Authority.
15. Powers and functions of executive committee of National Authority.
16. Functions of monitoring group.
17. Powers and functions of State Authority.
18. Powers and functions of steering committee of State Authority.
19. Functions and powers of executive committee of State Authority.
 (ii)

CLAUSES

CHAPTER V
FINANCE, ACCOUNTS, AUDIT AND ANNUAL REPORT
20. Budget of National Authority.
21. Investment of funds by National Authority.
22. Accounts and audit of National Authority.
23. Annual report of National Authority.
24. Annual report and audit report of National Authority to be laid before Parliament.
25. Budget of State Authority.
26. Investment of funds by State Authority.
27. Accounts and audit of State Authority.
28. Annual report of State Authority.
29. Annual report and audit report of State Authority to be laid before State
Legislature.

CHAPTER VI
MISCELLANEOUS

30. Power to make rules.

31. Transfer of assets liabilities etc.
32. Validation.
33. Power of Central Government to issue directions.
 AS INTRODUCED IN LOK SABHA

Bill No. 153 of 2015

THE COMPENSATORY AFFORESTATION FUND BILL, 2015

A

BILL
to provide for the establishment of funds under the public accounts of India and the public
accounts of each State and crediting thereto the monies received from the user agencies
towards compensatory afforestation, additional compensatory afforestation, penal
compensatory afforestation, net present value and all other amounts recovered from
such agencies under the Forest (Conservation) Act, 1980; constitution of an authority
at national level and at each of the State and Union territory Administration for
administration of the funds and to utilise the monies so collected for undertaking
artificial regeneration (plantations), assisted natural regeneration, protection of forests,
forest related infrastructure development, Green India Programme, wildlife protection
and other related activities and for matters connected therewith or incidental thereto.
WHERE AS the Supreme Court in its order in T.N. Godavarman Thirumulpad vs. Union
of India and Others [Writ Petition (Civil) No. 202 of 1995], dated the 30th October,
2002, observed that a Compensatory Afforestation Fund 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;
 2

AND WHEREAS it had also been observed that the money received from the user
agencies in cases where forest land diverted falls within protected areas, that is,
the areas notified under the Wild Life (Protection) Act, 1972 for undertaking 35 of 1972
activities related to protection of biodiversity or wildlife shall also be deposited
in the Fund;
AND WHEREAS the Supreme Court has directed that, besides artificial regeneration
(Plantations), the Fund shall also be utilised for undertaking assisted natural
regeneration, protection of forests, infrastructure development, wildlife protection
and other related activities and an independent system of concurrent monitoring
and evaluation should be evolved and implemented through the Compensatory
Afforestation Fund to ensure effective and proper utilisation of funds;
AND WHEREAS the Supreme Court in its judgment dated 26th September, 2005 in
the said Writ Petitiion observed that the Fund generated for protecting ecology
and providing regeneration should not be treated as a Fund under article 266 and
article 283 of the Constitution;
AND WHEREAS in its direction dated the 5th May, 2006, the Supreme Court had
directed that since the Government has not constituted a Compensatory
Afforestation Fund Management and Planning Authority (hereinafter referred to
as Authority), an ad hoc Authority should be constituted till the Compensatory
Afforestation Fund Management and Planning Authority becomes operational
and directed to centrally pool the money recovered on behalf of the said Authority
lying in the States and Union territories into the ad hoc Compensatory
Afforestation Fund Management and Planning Authority;
AND WHEREAS Central Government formulated guidelines dated the 2nd July, 2009
on the subject of State Authority for utilisation of funds lying with the ad hoc
Authority.
AND WHEREAS in its direction dated the 10th July, 2009, the Supreme Court had
directed that the guidelines and structure of the State Authority prepared by the
Central Government may be notified and implemented;
AND WHEREAS in its directions dated the 10th July, 2009, the Supreme Court
further directed that till an alternative system is put in place, after obtaining
permission from the Supreme Court, the money towards compensatory
afforestation, net present value and protected areas (national parks, wildlife
sanctuaries) shall continue to be deposited in the ad hoc Authority;
AND WHEREAS in compliance of the directions of the Supreme Court including its
order dated the 5th May, 2006, over rupees thirty eight thousand crores as
collected by the State Governments and Union territory Administrations have
been placed under the ad hoc Authority, and deposited in the nationalised banks;
AND WHEREAS absence of permanent institutional mechanism for utilisation of
funds collected by the State Governments and Union territory Administrations is
the main reason for accumulation of huge unspent funds in the ad hoc Authority;
NOW, THEREFORE, based on the above orders, directions and observations of the
Supreme Court to ensure safety, security and expeditious utilisation 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, it is proposed to create a National Compensatory Afforestation
Fund and a National Compensatory Afforestation Fund Management and Planning
Authority at the national level, and a State Compensatory Afforestation Fund
and a State Compensatory Afforestation Fund Management and Planning
Authority in each State and Union territory, by an Act of Parliament.
 3

BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:—

CHAPTER I
PRELIMINARY
1. (1) This Act may be called the Compensatory Afforestation Fund Act, 2015. Short title,
extent and
5 (2) It extends to the whole of India except the State of Jammu and Kashmir. commencement.

(3) Save as otherwise provided in this Act, it shall come into force on such date as the
Central Government may, by notification in the Official Gazette, appoint.
2. In this Act, unless the context otherwise requires,— Definitions.

(a) “ad hoc Authority” means the ad hoc Compensatory Afforestation Fund
10 Management and Planning Authority constituted under the order dated the 5th May,
2006 of the Supreme Court in T.N. Godavarman Thirumulpad vs. Union of India and
Others, [Writ Petition (Civil) No. 202 of 1995];
(b) “Chairperson, National Authority” means the Chairperson of the National
Authority;
15 (c) “Chairperson, State Authority” means the Chairperson of the State Authority;
(d) “compensatory afforestation” means afforestation done in lieu of the diversion
69 of 1980. of forest land for non-forestry use under the Forest (Conservation) Act, 1980;
(e) “environmental services” means—
(i) provision of goods such as wood, non-timber forest products, fuel,
20 fodder, water and provision of services such as grazing, tourism, wildlife protection
and life support;
(ii) regulating services such as climate regulation, disease control, flood
moderation, detoxification, carbon sequestration and health of soil, air and water
regimes;
25 (iii) non-material benefits obtained from ecosystems, spiritual, recreational,
aesthetic, inspirational, educational and symbolic;
(iv) supporting such other services necessary for the production of
ecosystem services, biodiversity, nutrient cycling and primary production;
(f) “Head of the regional office” means the senior-most officer appointed by the
30 Central Government at regional office to deal with the forest conservation matters
69 of 1980. under the Forest (Conservation) Act, 1980;
(g) “monitoring group” means a group of experts to monitor the activities
undertaken from amounts released from the National Fund and State Fund constituted
under sub-section (3) of section 9;
35 (h) “National Authority” means National Compensatory Afforestation Fund
Management and Planning Authority constituted under section 8;
(i) “National Fund” means the National Compensatory Afforestation Fund
established under sub-section (1) of section 3;
(j) “net present value” means the quantification of the environmental services
40 provided for the forest area diverted for non-forestry uses, as may be determined by an
expert committee appointed by the Central Government from time to time in this regard;
(k) “penal compensatory afforestation” means afforestation work to be
undertaken over and above the specified compensatory afforestation specified in the
69 of 1980. guidelines issued under the Forest (Conservation) Act, 1980, in lieu of the extent of
45 area over which non-forestry activities have been carried out without obtaining prior
approval of the competent authority under the Forest (Conservation) Act, 1980;
 4

(l) “prescribed” means prescribed by rules made by the Central Government

under this Act;
(m) “State Authority” means the State Compensatory Afforestation Fund
Management and Planning Authority constituted under section 10;
(n) “State Fund” means the State Compensatory Afforestation Fund established 5
by each State under sub-section (1) of section 4;
(o) “user agency” means any person, organisation 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) 10
Act, 1980 and the rules made and guidelines issued, thereunder. 69 of 1980.

CHAPTER II
ESTABLISHMENT, MANAGEMENT AND UTILISATION OF NATIONAL COMPENSATORY AFFORESTATION
FUND AND STATE COMPENSATORY AFFORESTATION FUNDS
Establishment 3. (1) With effect from such date as the Central Government may, by notification in the 15
of National Official Gazette, appoint in this behalf, there shall be established for the purposes of this
Fund.
Act, a special Fund to be called the “National Compensatory Afforestation Fund” under the
public account of India.
(2) The National Fund shall be under the control of the Central Government and
managed by the National Authority in such manner as may be prescribed. 20
(3) On the date of establishment of the National Fund, all monies collected by the
State Governments and Union territory Administrations which has been placed under the
ad hoc Authority and deposited in the nationalised banks shall be transferred to the National
Fund.
(4) There shall also be credited into the National Fund, by each State on yearly basis, 25
ten per cent. of the funds realised from the user agencies in respect of the forest land
diverted in their favour, which have been credited directly into the State Fund.
(5) There shall also be credited to the National Fund—
(a) grants-in-aid received, if any, by the National Authority;
(b) any loan taken or any borrowings made by the National Authority; 30
(c) any other sums received by the National Authority by way of benefaction,
gift or donations.
(6) The monies received in the National Fund shall be an interest bearing fund under
public accounts of India.
(7) The balance in the National Fund shall be non-lapsable and get interest as per the 35
rate declared by the Central Government on year to year basis.
Establishment 4. (1) With effect from such date as each State Government may, by notification in the
of State Fund. Official Gazette, appoint in this behalf, there shall be established for the purposes of this
Act, a special Fund to be called the “State Compensatory Afforestation Fund-……… (name
of State)” under public accounts of such State. 40

(2) The State Fund in each State shall be under the control of the State Government of
such State and managed by the State Authority of such State, in such manner as may be
prescribed.
(3) There shall be credited into the State Fund established under public accounts of
a State— 45
(i) the unspent balance of all monies which has been transferred by ad hoc
Authority to the State Compensatory Afforestation Compensatory Afforestation Funds
 5

Management and Planning Authority constituted in such State in compliance of

guidelines dated the 2nd July, 2009;
(ii) all monies transferable from the National Fund under clause (a) of section 5;
(iii) receipt of all monies from user agencies by such State towards compensatory
5 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
69 of 1980. provisions of the Forest (Conservation) Act, 1980; and
(iv) the funds recoverable from user agencies by such State in cases where
10 forest land diverted falls within the protected areas, that is, areas notified under sections
53 of 1972. 18, 26A or 35 of the Wild Life (Protection) Act, 1972 for undertaking activities relating
to the protection of biodiversity and wildlife.
(4) A State Government may also credit to the State Fund constituted by it—
(i) grants-in-aid received, if any, by the State Authority constituted in such
15 State;
(ii) any loan taken or any borrowings made by the State Authority constituted in
such State;
(iii) any other sums received by the State Authority constituted in such State by
way of benefaction, gift or donations.
20 (5) The monies received in the State Fund shall be an interest bearing fund under
public accounts of such State.
(6) The balance in each State Fund shall be non-lapsable and get interest as per the
rate declared by the Central Government on year to year basis.
5. Save as otherwise provided in this Act, the monies available in the National Fund Disbursement
25 shall be disbursed and utilised in the following manner, namely:— and utilisation
of National
(a) ninety per cent. of the all monies collected by a State, which has been placed Fund.
under the ad hoc Authority and the interest accrued thereon, shall be transferred to
the State Fund established in such state under sub-section (1) of section 4;
(b) the balance ten per cent. of all monies collected by the States and Union
30 territory Administrations, which has been placed under the ad hoc Authority and the
interest accrued thereon, and all fresh accrual to the National Fund, as provided in
sub-section (4) of section 3, and the interest accrued thereon, shall be utilised for
meeting-—
(i) the non-recurring and recurring expenditure for the management of the
35 National Authority including the salary and allowances payable to its officers
and other employees;
(ii) the expenditure incurred on monitoring and evaluation of works executed
by the National Authority and each State Authority;
(iii) the expenditure incurred on specific schemes approved by governing
40 body of the National Authority.
Explanation.—For the purposes of this section, “scheme’’ includes any institute,
society, centre of excellence in the field of forest and wildlife, pilot schemes, standardisation
of codes and guidelines and such other related activities for the forestry and wildlife sector.
6. Save as otherwise provided in this Act, the monies available in a State Fund shall Disbursement
45 be disbursed and utilised in the following manner, namely:— and
utilisation of
(a) the money received for compensatory afforestation, additional compensatory State Fund.
afforestation, penal compensatory afforestation, catchment area treatment plan and
 6

for any other site specific scheme may be used as per site-specific schemes submitted
by the State along with the approved proposals for diversion of forest land under the
Forest (Conservation) Act, 1980; 69 of 1980.

(b) the money received towards net present value and penal net present value shall be
used for artificial regeneration (plantation), assisted natural regeneration, forest management, 5
forest protection, infrastructure development, wildlife protection and management, supply
of wood and other forest produce saving devices and other allied activities in the manner as
may be prescribed;
(c) the interest accrued on funds available in a State Fund and the interest accrued on
all monies collected by the State Governments and Union territory Admionistrations, which 10
has been placed under the ad hoc Authority and deposited in the nationalised banks, in
compliance of the directions of the Supreme Court dated the 5th May, 2006, shall be used for
conservation and development of forest and wildlife in the manner as may be prescribed;
(d) all monies realised from the user agencies in accordance with the decision taken
by the Standing Committee of the National Board for Wild Life constituted under section 5A 15
of the Wild Life (Protection) Act, 1972 or the orders of the Supreme Court involving cases of 35 of 1972.
diversion of forest land in protected areas shall form the corpus and the income therefrom
shall be used exclusively for undertaking protection and conservation activities in protected
areas of the States and the Union territory Administrations and in exceptional circumstance,
a part of the corpus may also be used subject to prior approval of the National Authority; 20
(e) ten per cent. of amount realised from the user agencies, which has been credited
directly into the State Fund in a year shall be transferred to the National Fund to meet
expenditure as provided in clause (b) of section 5;
(f) the non-recurring and recurring expenditure for the management of a State Authority
including the salary and allowances payable to its officers and other employees may be met 25
from a part of the interest accrued on the amounts available in the State Fund, in the manner
as may be prescribed;
(g) in case of trans-boundary forestry or environmental implication of diversion of
forest land for non-forest purposes in a particular State or Union territory, if found expedient
and necessary by the National Authority, it may, in consultation with the concerned Sate 30
Authorities order that such sum as may be justified for reparation of the trans-boundary
effects, be transferred to State Fund of such State or States;
(h) State Authority shall release monies to agencies identified for execution of activities
in pre-determined installments as per the annual plan of operation finalised by steering
committee of such State Authority and executive committee of the National Authority. 35
Accounting 7. The accounting procedure to regulate the manner of crediting the monies to the
procedure. National Fund and State Fund in a year shall be in such manner as may be prescribed.

CHAPTER III
CONSTITUTION OF NATIONAL AUTHORITY AND STATE AUTHORITIES
Constitution 8. (1) With effect from such date as the Central Government may, by notification in the 40
of National Official Gazette, appoint in this behalf, there shall be constituted a National Authority to be
Authority.
called the “National Compensatory Afforestation Fund Management and Planning
Authority”.
(2) The National Authority shall manage and utilise the National Fund for the purposes
of this Act. 45
(3) The National Authority shall consist of a governing body and shall be assisted by
an executive committee, monitoring group and administrative support mechanism.
 7

(4) The governing body of the National Authority shall consist of the following,
namely:—
(i) Minister for Environment, Forest and Climate Change, Government of India—
Chairperson, ex officio;
5 (ii) Secretaries of Ministries of Environment, Forest and Climate Change; Finance
(Department of Expenditure); Rural Development (Department of Rural Development
and Land Resources) Agriculture; Panchayati Raj; Tribal Development; Science and
Technology and Chief Executive Officer, National Institution for Transforming India
Aayog, Government of India—Members, ex officio;
10 (iii) Director General of Forests and Special Secretary, Ministry of Environment,
Forest and Climate Change, Government of India—Member, ex officio;
(iv) Additional Director General of Forests (Forest Conservation), Ministry of
Environment, Forest and Climate Change, Government of India—Member, ex officio;
(v) Additional Director General of Forests (Wildlife), Ministry of Environment,
15 Forest and Climate Change, Government of India—Member, ex officio;
(vi) Mission Director, National Mission for a Green India, Ministry of Environment,
Forest and Climate Change, Government of India—Member, ex officio;
(vii) Financial Adviser, Ministry of Environment, Forest and Climate Change,
Government of India—Member, ex officio;

20 (viii) five Principal Chief Conservator of Forests, not more than one from each of
the ten regions, to be nominated by the Ministry of Environment, Forest and Climate
Change, Government of India on rotation basis for a period of two years,
at a time— Members, ex officio;
(ix) Inspector General of Forests (Forest Conservation), Ministry of Environment,
25 Forest and Climate Change, Government of India—Member, ex officio;
(x) two environmentalists or conservationists or scientists or economists or
social scientists appointed by the Central Government for a period of two years subject
to not more than two consecutive terms— Members.
(5) The Central Government may appoint an officer of the rank of an Additional
30 Director General of Forests as the 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.
9. (1) The governing body of the National Authority shall, in performance of its Executive
committee
functions and powers under the Act, be assisted by the executive committee and the
and
35 monitoring group. monitoring
group of
(2) The executive committee of the National Authority shall consist of the following, National
namely:— Authority.

(i) Director General of Forests and Special Secretary, Ministry of Environment,

Forest and Climate Change, Government of India—Chairperson, ex officio;

40 (ii) Additional Director General of Forests (Forest Conservation), Ministry of

Environment, Forest and Climate Change, Government of India—Member, ex officio;
(iii) Additional Director General of Forests (Wildlife), Ministry of Environment,
Forest and Climate Change, Government of India—Member, ex officio;
(iv) Mission Director, National Mission for a Green India, Ministry of
45 Environment, Forest and Climate Change, Government of India—Member, ex officio;
 8

(v) Financial Adviser, Ministry of Environment, Forest and Climate Change,

Government of India—Member, ex officio;
(vi) Head of all regional offices of the Ministry of Environment, Forest and
Climate Change, Government of India —Members, ex officio;
(vii) Inspector General of Forests (Forest Conservation), Ministry of Environment, 5
Forest and Climate Change, Government of India—Member, ex officio;
(viii) a professional ecologist, not being from the Central Government, to be
appointed by the Central Government— Member;
(ix) two experts, one each in the fields of forestry and forest economy
development, not being from the Central Government, to be appointed by the Central 10
Government— Members;
(x) Chief Executive Officer of the National Authority—Member-Secretary;
(3) The monitoring group shall consist of six 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 15
and Climate Change, Government of India.
(4) The following officers shall be appointed by the National Authority for a period
not exceeding five years, to assist the executive committee in performance of its functions
and powers under the Act, namely:—
(i) Joint Chief Executive Officer of the rank of Inspector General of Forests; 20
(ii) Financial Advisor and Chief Accounts Officer of the rank of Director in the
Government of India; and
(iii) Deputy Chief Executive Officers of the rank of Deputy Inspector General of
Forests.
(5) The governing body of the National Authority may with the prior concurrence of 25
the Central Government create posts in the National Authority at the level of Assistant
Inspector General of Forests and other officials to assist the executive committee and
monitoring group in performance of its functions under the Act.
Constitution 10. (1) With effect from such date as the Central Government may, by notification in
of State the Official Gazette, appoint in this behalf, there shall be constituted a State Authority to be 30
Authority. called the “State Compensatory Afforestation Fund Management and Planning Authority”
in each State and Union territory.
(2) The Central Government may, if so desires, appoint different dates for constitution
of State Authority in each of the States and Union territories.
(3) The State Authority constituted in a State shall be responsible for the management 35
of the State Fund established under public account of such State and its utilisation for the
purposes of the Act.
(4) The State Authority shall consist of a governing body and shall be assisted by a
steering committee and an executive committee.
(5) The governing body of a State Authority shall consist of the following, namely:— 40
(i) Chief Minister—Chairperson, ex officio;
(ii) Minister of Forests—Member, ex officio;
(iii) Chief Secretary—Member, ex officio;
(iv) Principal Secretaries, Departments of Environment, Finance, Planning, Rural
Development, Revenue, Agriculture, Tribal Development, Panchayati Raj, Science and 45
Technology—Members, ex officio;
(v) Principal Chief Conservator of Forests (Head of Forest Force)—Member, ex
officio;
 9

(vi) Chief Wildlife Warden—Member, ex officio;

(6) Principal Secretary in-charge of the Forest Department in a State or the Union
territory shall be Member Secretary of the State Authority in such State or Union territory.
(7) The State Government or Union territory Administration shall appoint an officer of
5 the rank not below the rank of a Chief Conservator of Forests as the Chief Executive Officer
of the State Authority who shall be the Member- Secretary of the steering committee and
the executive committee of the State Authority.
11. (1) The governing body of the State Authority shall, in performance of its functions Steering
and powers under the Act, be assisted by the steering committee and the executive committee. committee
and executive
10 (2) The steering committee of a State Authority shall consist of the following, namely:— committee of
State
(i) Chief Secretary—Chairperson, ex officio; Authority.
(ii) Principal Secretaries, Departments of Forests, Environment, Finance, Planning,
Rural Development, Revenue, Agriculture, Tribal Development, Panchayati Raj, Science
and Technology—Members, ex officio;
15 (iii) Principal Chief Conservator of Forests (Head of Forest Force)- Member, ex
officio;
(iv) Chief Wildlife Warden—Member, ex officio;

69 of 1980.
(v) Nodal Officer, the Forest (Conservation) Act, 1980—Member, ex officio;
(vi) Head of the concerned regional office of the Ministry of Environment, Forest
20 and climate change—Member, ex officio;
(vii) Nodal Officer, State Forest Development Agency—Member, ex officio;
(viii) Chief Executive Officer, State Authority—Member-Secretary.
(3) The executive committee of a State Authority shall consist of the following,
namely:—
25 (i) Principal Chief Conservator of Forests (Head of Forest Force)—Chairperson,
ex officio;
(ii) Chief Wildlife Warden- Member, ex officio;
(iii) Chief Conservator of Forests (Plan/Schemes)—Member, ex officio;
(iv) Principal Chief Conservator of Forests or Additional Principal Chief
30 Conservator of Forest (Research)- Member, ex officio;
(v) Nodal Officer, State Forest Development Agency—Member, ex officio
(vi) a representative each of the Departments of Environment, Finance, Planning,
Rural Development, Revenue, Agriculture, Tribal Development, Panchayati Raj, Science
and Technology—Members, ex officio;

35 (vii) Financial Controller or Financial Adviser, to be nominated by the Finance

Department—Member, ex officio;
(viii) two eminent non- government organisations to be appointed by the State
Government—Members;
(ix) two representatives of district level Panchayati Raj Institutions to be
40 appointed by the State Government—Members;
(x) Chief Executive Officer, State Authority—Member Secretary.
(4) The State Authority may appoint the following officers for a period not exceeding
five years, to assist the steering committee and executive committee in performance of its
functions under the Act, namely:—
45 (i) Joint Chief Executive Officer of the rank not below the rank of a Conservator
of Forests;
 10

(ii) Financial Advisor and Chief Accounts Officer of the rank not below the rank
of a Deputy Secretary in the State Government;
(iii) Deputy Chief Executive Officer of the rank not below the rank of a Deputy
Conservator of Forests.
(5) The governing body of the State Authority may with the prior concurrence of the 5
State Government create posts in the State Authority at the level of Assistant Conservator
of Forests and other officials to assist the steering committee and executive committee in
performance of its functions under the Act.
Term of office 12. Save as otherwise provided in this Act, the terms of office and other conditions
and conditions of the service of the members of the National Authority, executive committee, monitoring 10
of service of
members.
group, Chief Executive Officer and officials appointed by the National Authority, members
of State Authority, steering committee and executive committee of each State Authority
shall be such as may be prescribed.
Disqualifications. 13. A person shall be disqualified for being appointed as a member of the National
Authority, executive committee of the National Authority, a State Authority, steering 15
committee and executive committee of a State Authority, monitoring group, if he—
(i) has been convicted and sentenced to imprisonment for an offence which, in
the opinion of the Central Government, involves moral turpitude; or
(ii) is an undischarged insolvent; or
(iii) is of unsound mind and stands so declared by the competent court; or 20
(iv) has been removed or dismissed from the service of the Government or
organisation or undertaking owned by the Government; or
(v) has, in the opinion of the Central Government, such financial or other interest
in the National Authority or the concerned State Authority as is likely to affect the
duties discharged by him of his function as a member. 25
CHAPTER IV
POWERS AND FUNCTIONS OF NATIONAL AUTHORITY AND STATE AUTHORITIES
Powers and 14. (1) The governing body of the National Authority shall—
functions of
National (i) formulate broad policy framework for functioning of the National Authority
Authority. and State Authorities as may be notified by the Central Government; 30
(ii) approve the annual report and audited accounts of the National Authority;
(iii) review reports on decision taken by executive committee and monitoring
group of the National Authority including investment decisions;
(iv) approve the proposal for the schemes specified in sub-clause (iii) of clause
(b) of section 5; 35

(v) approve the proposals for creation of posts in the National Authority, subject
to prior permission of the Central Government;
(vi) provide a mechanism to State Authorities to resolve issues of inter-State or
Centre-State character;
(vii) formulate such procedures for delegation of financial and administrative 40
powers to the National Authority and State Authorities as may be notified by the
Central Government;
(2) The governing body of the National Authority shall meet at least once in six
months.
 11

(3) The governing body and executive committee of the National Authority and the
monitoring group of the National Authority shall meet 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.
5 15. (1) The executive committee of the National Authority shall— Powers and
functions of
(i) approve annual plan of operations of the State Authorities; executive
(ii) formulate proposals for schemes specified in sub-clause (iii) of clause (b) of committee of
National
section 5; Authority.
(iii) execute schemes specified in sub-clause (iii) of clause (b) of section 5;
10 (iv) deploy staff on contract or on deputation basis to the posts in the National
Authority;
(v) formulate proposals for creation of posts in the National Authority at the
level of Assistant Inspector General of Forests and other officers;
(vi) invest surplus amounts available in the National Fund;
15 (vii) execute other day-to-day work in respect of receipt of amounts in the National
Fund;
(viii) maintain books of account and such other records;
(ix) facilitate scientific, technological and other assistance that may be required
by State Authorities;
20 (x) present its decisions to the governing body of the National Authority for
information;
(xi) maintain and update a public information system on the National Authority
and present all information on its transaction in the public domain;
(xii) undertake any other work as may be assigned by the governing body of the
25 National Authority or the Central Government, from time to time.
(2) The executive committee of the National Authority shall meet at least once in
every three months.
16. (1) The monitoring group shall— Functions of
monitoring
(i) evolve independent system for concurrent monitoring and evaluation of the group.
30 works implemented in the States and Union territories utilising the funds released by
the National Authority and State Authorities to ensure effective and proper utilisation
of funds by utilising the services of the regional offices, of the Central Government in
the Ministry of Environment, Forest and Climate Change:
Provided that the Central Government may also undertake third party monitoring
35 and evaluation of the works implemented in the States and Union territories utilising
the funds released by the National Authority and State Authorities through individual
and institutional experts;
(ii) inspect and undertake financial audit of works executed by utilising the
funds released by the National Authority and State Authorities in the State and Union
40 territories;
(iii) devise measures for transparency and accountability.
(2) The monitoring group shall meet at least once in three months.
17. (1) The governing body of a State Authority shall— Powers and
functions of
(i) lay down the broad policy framework for the functioning of such State Authority State
45 within the overall framework notified by the Central Government on the recommendations Authority.
of the National Authority;
 12

(ii) review the working of the State Authority from time to time.
(2) The governing body of a State Authority shall meet at least once in six months.
(3) The governing body, steering committee and executive committee of a State
Authority shall meet at such places and shall observe such rules and procedures in regards
to transaction of business at its meeting, including the quorum thereat, as may be prescribed. 5
Powers and 18. The steering committee of a State Authority shall—
functions of
steering (i) scrutinise and approve the annual plan of operations prepared by the executive
committee of committee of such State Authority and send the same to the executive committee of the
State National Authority for final approval;
Authority.
(ii) monitor the progress of the utilisation of funds released from the State Fund; 10
(iii) review reports on decision taken by executive committee including investment
decisions;
(iv) approve, subject to prior concurrence of the State Government, proposals
formulated by the executive committee for creation of posts in the State Authority;
(v) approve annual report of the State Authority and send the same to the State 15
Government to lay it, each year, in each House of the State Legislature;
(vi) ensure inter-departmental coordination.
Functions and 19. (1) The executive committee of a State Authority shall—
powers of
executive (i) formulate and submit annual plan of operations to the executive committee of
committee of the National Authority after obtaining concurrence of the steering committee of the 20
State State Authority;
Authority.
(ii) undertake qualitative and quantitative supervision, monitoring and evaluation
of the works being implemented from amounts available in the State Fund;
(iii) invest surplus amounts available in the State Fund under public accounts of
such State; 25
(iv) maintain books of accounts and other records;
(v) submit reports to the steering committee of the State Authority;
(vi) prepare annual report of the State Authority;
(vii) deploy staff on contractual basis or on deputation to the posts in the State
Authority; 30
(viii) formulate proposals for creation of posts in the State Authority;
(ix) be responsible for delegation of financial or administrative powers;
(x) be responsible for other day-to-day working in respect of the State Authority;
(xi) maintain and update public information system on the State Authority and
present all information on its transaction in the public domain; 35
(xii) undertake any other work as may be assigned by the governing body or
steering committee of the State Authority or the State Government, from time to time.
(2) The executive committee of a State Authority shall meet at least once in every
three months.

CHAPTER V 40
FINANCE, ACCOUNTS, AUDIT AND ANNUAL REPORT

Budget of 20. (1) The National Authority shall prepare its budget for the next financial year,
National showing the estimated receipts and expenditure of the National Authority and forward the
Authority.
same to the Central Government, in such form and at such time in each financial year as may
be prescribed. 45
 13

(2) The National Authority, shall adopt financial regulation and procedures, in particular
the procedure for drawing up and implementing the budget of the National Authority as
may be prescribed.
21. The National Authority may invest its funds, including any reserve fund, in the Investment
5 securities of the Central Government and in scheduled banks in such manner as may be of funds by
National
prescribed:
Authority.
Provided that the grants received from the Central Government shall not be invested
and shall be utilised for the purposes and in the manner attached to it.
22. (1) The National Authority shall maintain proper accounts and other relevant Accounts and
10 records and prepare an annual statement of accounts in such form as may be prescribed in audit of
National
consultation with the Comptroller and Auditor-General of India. Authority.
(2) The accounts of the National Authority shall be audited by the Comptroller and
Auditor-General of India at such intervals as may be specified by him and any expenditure
incurred in connection with such audit shall be payable by the National Authority to the
15 Comptroller and Auditor-General.
(3) The Comptroller and Auditor General and any other person appointed by him in
connection with the audit of the accounts of the National Authority shall have the same
right and privileges and authority in connection with such audit as the Comptroller and
Auditor-General generally has in connection with the audit of the Government accounts
20 and, in particular, shall have the right to demand the production of books, accounts, connected
vouchers and other documents and papers and to inspect the office of the National Authority.
(4) The accounts of the National Authority as certified by the Comptroller and Auditor-
General or any other person appointed by him in this behalf together with the audit report
thereon, shall be forwarded annually to the Central Government by the National Authority.

25 (5) The Comptroller and Auditor-General shall, within a period of six months from the
date of commencement of the Act, audit the accounts of the all monies collected by the
State Governments and Union territory Administrations, which has been placed under the
ad hoc Authority and deposited in the nationalised banks and submit the report to the
Central Government under this section.

30 (6) The Central Government shall have the power to conduct the special audit or
performance audit of the National Fund and of the National Authority through the Comptroller
and Auditor- General.
23. (1) The National Authority shall prepare, its annual report, giving a full account Annual report
of its activities during the previous financial year and forward a copy thereof to the Central of National
Authority.
35 Government, in such form and at such time, for each financial year, as may be prescribed.
(2) The annual report shall, inter alia, provide for—
(i) the summary of monitoring and evaluation of activities undertaken from
amounts released from the National Fund and State Funds during the year;
(ii) the summary of specific schemes specified in sub-clause (iii) of clause (b) of
40 section 5 executed during the year;
(iii) the amount of money received and expended.
24. The Central Government shall cause the annual report and audit report together Annual report
with a memorandum of action taken on the recommendations contained therein to be laid as and audit
report of
soon as may be after the reports are received before each House of Parliament. National
Authority to
be laid before
Parliament.
 14

Budget of 25. (1) Each State Authority shall prepare its budget for the next financial year,
State showing the estimated receipts and expenditure of the State Authority and forward the
Authority.
same to the State Government, in such form and at such time, in each financial year, as may
be prescribed.
(2) Each State Authority shall adopt financial regulation and procedures, in particular 5
the procedure for drawing up and implementing the budget of the State Authority as may be
prescribed.
Investment 26. State Authority may invest funds available in the State Fund under public
of funds by accounts of such State in the securities of the Central Government and in scheduled banks
State 10
Authority.
in such manner as may be prescribed:
Provided that the grants received from the State Government shall not be invested
and shall be utilised for the purpose and in the manner prescribed.
Accounts and 27. (1) Each State Authority shall maintain proper accounts and other relevant records
audit of State and prepare an annual statement of accounts in such form as may be prescribed in
Authority.
consultation with the Comptroller and Auditor-General of India. 15
(2) The accounts of each State Authority shall be audited by the Comptroller and
Auditor-General at such intervals as may be specified by him and any expenditure incurred
in connection with such audit shall be payable by the State Authority to the Comptroller
and Auditor-General.
(3) The Comptroller and Auditor-General and any other person appointed by him in 20
connection with the audit of the accounts of the State Authority shall have the same right
and privileges and authority in connection with such audit as the Comptroller and Auditor-
General generally has in connection with the audit of the Government accounts and, in
particular, shall have the right to demand the production of books, accounts, connected
vouchers, other documents and papers and to inspect the office of the State Authority. 25
(4) The Accounts of the State Authority as certified by the Comptroller and Auditor-
General or any other person appointed by him in this behalf together with the audit report
thereon, shall be forwarded annually to the State Government by the State Authority.
(5) The Comptroller and Auditor-General shall, within a period of six months from the
date of commencement of the Act, audit the accounts of all the monies which have been 30
transferred by the ad hoc Authority to the State Compensatory Afforestation Fund
Management and Planning Authorities constituted in the States in compliance of guidelines
dated the 2nd July, 2009 and submit the report to the State Government under this section.
(6) The Central Government and the State Government concerned shall have the
power to conduct the special audit or performance audit of the State Fund and of the State 35
Authority through the Comptroller and Auditor-General.
Annual report 28. (1) Each State Authority shall prepare its annual report, giving a full account of
of State
its activities during the previous financial year and forward a copy thereof to the concerned
Authority.
State Government, in such form and at such time, for each financial year, as may be prescribed.
(2) The annual report of a State Authority shall, inter alia, provide for— 40

(i) the number and location of each reforestation, afforestation and conservation
activity subject to the requirement of this section;
(ii) the amount and location of lands in hectares, cleared, conserved and planted
in connection with the activity; and
(iii) the amount of afforestation money collected and expended. 45
 15

29. The State Government shall cause the annual report and the audit report together Annual report
with a memorandum of action taken on the recommendations contained therein to be laid as and audit
report of
soon as may be after the reports are received before each House of the State Legislature. State
Authority to
be laid before
State
Legislature.
CHAPTER VI
5 MISCELLANEOUS
30. (1) The Central Government may, after previous publication, make rules for carrying Power to
out the purposes of this Act. make rules.

(2) In particular, and without prejudice to the generality of the foregoing power, such
rules may provide for all or any of the following matters, namely:—
10 (a) the management of the National Fund by the National Authority under
sub-section (2) of section 3;
(b) the management of State Fund by the State Authorities under sub-section (2)
of section 4;
(c) the manner of using the money for purposes specified in clause (b) of section 6;
15 (d) the manner of utilising the money for purposes specified in clause (c) of
section 6;
(e) the manner of payment of the salary and allowances payable to the officers
and other employees of the State Authority under clause (f) of section 6;
(f) the accounting procedure regulating the manner of crediting the monies to
20 the National Fund and State Funds under section 7;
(g) the terms of office and other conditions of the service of the members of the
National Authority, executive committee, monitoring group, Chief Executive Officer
and officials appointed by the National Authority, members of State Authority, steering
committee and executive committee of each State Authority under section 12;
25 (h) the rules and procedures in respect of the transaction of business of the
governing body and executive committee of the National Authority and monitoring
group of the National Authority and the place of meeting, including the quorum under
sub-section (3) of section 14;
(i) the rules and procedures in respect of the transaction of business of the
30 governing body, steering committee and executive committee of a State Authority and
the place of meeting, including the quorum under sub-section (3) of section 17;
(j) the preparation of the budget of the National Authority under sub-section (1)
of section 20;
(k) the financial regulation and procedures, in particular the procedure for drawing
35 up and implementing the budget of the National Authority under sub-section (2) of
section 20;
(l) the investment of the funds of the National Authority under section 21;
(m) the maintenance of the accounts and other relevant records and preparation
of an annual statement of accounts by the National Authority under sub-section (1) of
40 section 22;
(n) the preparation of the annual report by the National Authority under sub-
section (1) of section 23;
(o) the preparation of the budget of the State Authority under sub-section (1) of
section 25;
 16

(p) the financial regulation and procedures, in particular the procedure for drawing
up and implementing the budget of the State Authorities under sub-section (2) of
section 25;
(q) the investment of funds by the State Authorities under section 26;
(r) the maintenance of the accounts and other relevant records and preparation 5
of annual statement of accounts by each State Authority under sub-section (l) of
section 27;
(s) the preparation of the annual report by the State Authorities under sub-
section (1) of section 28; and
(t) any other matter which is required to be, or may be prescribed. 10
(3) Every rule made under this Act shall be laid, as soon as may be after it is made,
before each House of Parliament, while it is in session, for a total period of thirty days which
may be comprised in one session or in two or more successive sessions, and if, before the
expiry of the session immediately following the session or the successive sessions aforesaid,
both Houses agree in making any modification in the rule or both Houses agree that the rule 15
should not be made, the rule shall, thereafter have effect only in such modified form or be of
no effect, as the case may be; so; however, that any such modification or annulment shall be
without prejudice to the validity of anything previously done under that rule.
Transfer of 31. (1) On and from the date of constitution of the National Authority—
assets,
liabilities etc. (i) all the assets and liabilities of the ad hoc Authority shall stand transferred to, 20
and vested in, the National Authority;
Explanation.—The assets of the ad hoc Authority shall be deemed to include
all rights and powers, all properties, whether movable or immovable, including in
particular, cash balances, deposits, and all other interests and rights in, or arising of,
such properties as may be in the possession of the ad hoc Authority and all books of 25
account and other documents relating to the same, and liabilities shall include all
debts, liabilities and obligations of whatever kind;
(ii) without prejudice to the provisions of clause (i), all debts, obligations and
liabilities incurred, all contracts entered into and all matters and things engaged to be
done by, with or for the ad hoc Authority immediately before constitution of the 30
National Authority, for or in connection with the purpose of the ad hoc Authority, shall
be deemed to have been incurred, entered into or engaged to be done by, with or for,
the National Authority;
(iii) all sums of money due to the ad hoc Authority immediately before constitution
of the National Authority shall be due to the National Authority; 35
(iv) all suits and legal proceedings instituted or which could have been instituted
by or against the ad hoc Authority may be continued or may be instituted by or
against the National Compensatory Authority.
(2) On and from the date of constitution of a State Authority—
(i) all the assets and liabilities of the State Compensatory Afforestation Fund 40
Management and Planning Authority constituted in such State in compliance of
guidelines dated the 2nd July, 2009 shall stand transferred to, and vested in, the State
Authority;
Explanation.—The assets of the State Compensatory Afforestation Fund
Management and Planning Authority constituted in such State in compliance of 45
guidelines dated the 2nd July, 2009 shall be deemed to include all rights and powers, all
properties, whether movable or immovable, including in particular, cash balances,
deposits, and all other interests and rights in, or arising of, such properties as may be
in the possession of the State Compensatory Afforestation Fund Management and
Planning Authority constituted in such State in compliance of guidelines dated the 50
2nd July, 2009 and all books of account and other documents relating to the same, and
liabilities shall include all debts, liabilities and obligations of whatever kind;
 17

(ii) without prejudice to the provisions of clause (i), all debts, obligations and
liabilities incurred, all contracts entered into and all matters and things engaged to be
done by, with or for the State Compensatory Afforestation Fund Management and
Planning Authority constituted in such State in compliance of guidelines dated the
5 2nd July, 2009 before this Act came into force, for or in connection with the purpose of
the State Compensatory Afforestation Fund Management and Planning Authority
constituted in such State in compliance of guidelines dated the 2nd July, 2009, shall be
deemed to have been incurred, entered into or engaged to be done by, with or for, the
State Authority;

10 (iii) all sums of money due to the State Compensatory Afforestation Fund
Management and Planning Authority constituted in such State in compliance of
guidelines dated the 2nd July, 2009 before constitution of the State Authority shall be
due to the State Authority;
(iv) all suits and legal proceedings instituted or which could have been instituted
15 by or against the State Compensatory Afforestation Fund Management and Planning
Authority constituted in such State in compliance of guidelines dated the 2nd July,
2009 may be continued or may be instituted by or against the State Authority.
32. (1) Notwithstanding anything contained in any judgment, decree or order of any Validation.
court, the amount credited to the National Fund shall be deemed to be credited and shall
20 always be deemed to have been credited to the public account of India within the meaning
of articles 266 and 283 of the Constitution, and it shall be regulated by law made by Parliament
in this behalf.
(2) Notwithstanding anything contained in any judgment or order of any court, all the
monies collected by the State Governments and the Union territory Administrations which
25 has been placed under the ad hoc Authority and deposited in the nationalised banks and
the interest accrued thereon shall stand transferred to the National Fund.
(3) Notwithstanding anything contained in any judgment or any order of any court,
the amount credited to the State Fund shall be deemed to be credited and shall always be
deemed to have been credited to the public account of the State within the meaning of
30 articles 266 and 283 of the Constitution, and it shall be regulated by law made by the State
Legislature in this behalf.
33. (1) The Central Government may, from time to time, by writing give such directions Power of
to the National Authority and each State Authority, as it may think necessary. Central
Government
(2) Without prejudice to the foregoing provisions of this Act, the Central Government to issue
directions.
35 may, if it finds necessary or expedient in the public interest, issue such policy directives to
the National Authority or each State Authority, in writing, in exercise of its powers or the
performance of its functions under this Act, and such policy directives shall be binding
upon the National Authority, or as the case may be, the State Authority.
(3) The decision of the Central Government, whether a question is one of policy or
40 not, shall be final.
 STATEMENT OF OBJECTS AND REASONS
As the diversion of forest land for non-forestry purposes was causing loss to the
valuable forests, the Forest (Conservation) Act, 1980 was enacted to maintain a rational
balance between the objectives of conservation and development. The Forest (Conservation)
Act, 1980 makes provision for conservation of forest and provide for the basic framework for
regulating indiscriminate diversion or use of forest for the developmental needs of a State. It
intends to harmonize development with that of conservation of forests and forest eco system.
The compensatory afforestation envisages additional plantation activities by utilising the
money deposited by the user agency for the purpose.
2. The Hon'ble Supreme Court in its order in TN. Godavarman Thirumulpad v. Union
of India [Writ Petition (C) No. 202 of 1995], dated 30th October, 2002, observed that a
Compensatory Afforestation Fund may be created in which all the monies received from the
user agencies shall be deposited. The Court directed that the Fund shall be utilised for
plantations, protection of forests, wildlife protection and other related activities. Presently,
in compliance with the direction of the Supreme Court, all monies collected under the scheme
has been placed under an ad hoc Compensatory Afforestation Fund Management and
Planning Authority (CAMPA) and deposited in the nationalised banks.
3. The Hon'ble Supreme Court in its Judgment dated the 26th September 2005 in the
aforesaid case observed that the fund generated for protecting ecology and providing
regeneration should not be treated as a fund under article 266, article 283 or article 284 of the
Constitution. Funds are therefore; kept outside the Consolidated Fund of India or Public
Account of India. In the absence of proper institutional mechanism with adequate statutory
backup amount of unspent funds has increased to more than rupees thirty eight thousand
crorers.
4. The Comptroller and Auditor General in its report on Compensatory afforestation
in India (21 of 2013) observed that given the substantial amounts of funds being collected
under the compensatory afforestation, the expenditure therefrom, the overall objectives of
conservation, protection, regeneration and management of forests, conservation, protection
and management of wild life and its habitats and compensatory afforestation; the clear
public purpose involved in the work relating to CAMPA, there is need to review the existing
paradigm of CAMPA. The Comptroller and Auditor General recommended that this should
be done in a way that enhances transparency, brings CAMPA within the broader focus of
both Parliament and State Legislatures and in greater public view so as to ensure the largest
possible stakeholders' participation. Towards this end it would be appropriate if the amounts
lying in ad hoc CAMPA are transferred into the Public Account. The Comptroller and Auditor
General has also observed that the receipts accruing into the ad hoc CAMPA are essentially
payments being made for the acquisition of public assets, namely, forest land for non-forest
purposes by user agencies. The receipts, so arising, in essence are non-tax revenue, as are
forest receipts.
5. Accordingly, to ensure safety, security and expeditious utilisation in a transparent
manner of funds accumulated with the ad hoc CAMPA and the funds to be collected by the
State Governments and Union territory Administrations it is proposed to enact a legislation,
namely, the Compensatory Afforestation Fund Bill, 2015 to provide for the establishment of
a Statutory Fund and a Management Authority at the National level and at each State and
Union territory.

18
 19

6. The Bill will provide the required legal backing for setting up of required institutional
mechanism both at the Government of India and in each State and Union territory for
expeditiously, and utilisation, in a transparent manner, of amounts realised in lieu of forest
land diverted for non-forest purpose.
7. The Bill seeks to achieve the above objectives.

PRAKASH JAVADEKAR.
NEW DELHI;
The 3rd May, 2015.

————

PRESIDENT’S RECOMMENDATION UNDER ARTILCLE 117 OF THE CONSTITUTION

OF INDIA

————

[Copy of letter No. 11-100/2015-FC dated 5 May, 2015 from Shri Prakash Javadekar,
Minister of Environment, Forest and Climate Change to the Secretary General, Lok Sabha]

The President, having been informed of the subject matter of the Compensatory
Afforestation Fund Bill, 2015 recommends under clauses (1) and (3) of article 117 of the
Constitution of India, the introduction in and consideration by Lok Sabha, of the Bill.
 FINANCIAL MEMORANDUM
1. Sub-clause (1) of clause 3 of the Bill provides for the establishment of the National
Compensatory Afforestation Fund under the public accounts of India. Sub-clause (3) of the
said clause provides that all monies collected by the State Governments and Union territory
Administration, which have been placed under the ad hoc Compensatory Afforestation
Fund Management and Planning Authority (Authority) and deposited in the nationalised
banks shall be transferred to the National Compensatory Afforestation Fund. Sub-clause (4)
and sub-clause (5) of the said clause provide for the details of the receipts of monies credited
into the National Compensatory Afforestation Fund.
2. Sub-clause (1) of clause 4 of the Bill provides for establishment of a State
Compensatory Afforestation Fund under public account of each State. Sub-clause (3) and
sub-clause (4) of the said clause provide for the details of the receipts of monies credited into
the State Compensatory Afforestation Fund.
3. Clause 5 of the Bill provides for the details of the disbursement and utilisation of
monies available in the National Compensatory Afforestation Fund. Clause 6 of the Bill
provides for the details of the disbursement and utilisation of monies available in a State
Compensatory Afforestation Fund.
4. Sub-clause (1) of clause 8 of the Bill provides for constitution of the National
Authority and sub-clause (3) thereof provides that the National Authority shall be assisted
by an executive committee, a monitoring group and administrative support mechanism. Sub-
clause (5) provides for appointment of an officer of the rank of Additional Director General of
Forests as the Chief Executive Officer of the National Authority who shall be the Member-
Secretary of the Governing Body and the Executive Committee.
5. Sub-clause (4) of clause 9 provides for the appointment of a Joint Chief Executive
Officer of the rank of Inspector General of Forests, a 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 to assist the Executive Committee
in performance of its functions and powers for a period not exceeding five years. Sub-clause
(5) of said clause provides for creation, with prior concurrence of the Central Government, of
posts in National Authority at the level of Assistant Inspector General of Forests and other
officials to assist the executive committee and monitoring group in performance of its
functions.
6. Sub-clause (1) of clause 10 of the Bill provides for constitution of a State Authority
in each State and Union territory and sub-clause (4) thereof provides that the State Authority
shall be assisted by a steering committee and an executive committee. Sub-clause (7) provides
for appointment of an officer not below the rank of a Chief Conservator of Forests as the
Chief Executive Officer of a State Authority who shall be the Member- Secretary of the
steering committee and the executive committee.
7. Sub-clause (4) of clause 11 provides for the appointment of Joint Chief Executive
Officer not below the rank of a Conservator of Forests, a Financial Advisor and Chief
Accounts Officer not below the rank of a Deputy Secretary in the State Government and
Deputy Chief Executive Officer not below the rank of a Deputy Conservator of Forests to
assist the steering committee and the executive committee of a State Authority in performance
of its functions for a period not exceeding five years. Sub-clause (5) of the said clause

20
 21

provides for creation, with prior concurrence of the State Government, of posts in State
Authority at the level of Assistant Conservator of Forests and other officials to assist the
steering committee and executive committee in performance of its functions.
8. The Bill, if enacted and brought into operation, would not involve any expenditure
from Consolidated Fund of India or Consolidated Fund of any of the States. It would however,
involve from the National Fund and State Funds a recurring expenditure of approximately
rupees 75 crore per annum and a non-recurring expenditure of approximately rupees 6,000
crore per annum.
 MEMORANDUM REGARDING DELEGATED LEGISLATION
Sub-clause (1) of clause 3 empowers the Central Government to establish the National
Compensatory Afforestation Fund by notification in the official Gazette. Sub-clause (2) of
the said clause empowers the Central Government to make rules to manage the National
Fund.
2. Sub-clause (1) of clause 4 empowers the State Government to establish the State
Compensatory Afforestation Fund for each State by notification in the official Gazette. Sub-
clause (2) of the said clause empowers the Central Government to make rules to manage the
State Fund.
3. Sub-clause (b) of clause 6 empowers the Central Government to make rules for
disbursement and utilisation of net present value. Sub- clause (c) of the said clause empowers
the Central Government to make rules for utilisation of the interest accrued on the fund
available in State Fund and interest accrued on all monies placed under the ad hoc Authority
for conservation and development of forest and wildlife Sub-clause (f) of the said clause
empowers the Central Government to make rules to meet non-recurring and recurring
expenditure for the management of a State Authority including the salary and allowances
payable to its officers and other employees from a part of the interest accrued on the amounts
available in the State Fund.
4. Clause 7 empowers the Central Government to make rules for regulating the manner
of crediting the monies to the National Fund and State Fund.
5. Sub-clause (1) of clause 8 empowers the Central Government to constitute the
National Compensatory Afforestation Fund Management and Planning Authority by
notification in the official Gazette.
6. Sub-clause (1) of clause 10 empowers the Central Government to constitute the
State Compensatory Afforestation Fund Management and Planning Authority in each State
and Union territory by notification in the official Gazette.
7. Clause 12 empowers the Central Government to make rules for providing the terms of
office and other conditions of the service of the members of the National Authority, executive
committee, monitoring group, Chief Executive Officer and officials appointed by the National
Authority, members of State Authority, steering committee and executive committee of each
State Authority.
8. Sub-clause (3) of clause 14 empowers the Central Government to make rules for the
observing such rules and procedures in regard to transaction of business of the meetings of
the National Authority including the quorum.
9. Sub-clause (3) of clause 17 empowers the Central Government to make rules for the
observing such rules and procedures in regard to transaction of business of the meetings of
the State Authority including the quorum.
10. Sub-clause (1) of clause 20 empowers the Central Government to make rules for
preparation of the budget for the next financial year showing the estimated receipts and
expenditure of the National Authority and forwarding the same to the Central Government.
Sub-cause (2) of the said clause empowers the Central Government to make rules for financial
regulation and procedures for drawing up and implementing the budget of the National
Authority.
11. Clause 21 empowers the Central Government to make rules for investments of
funds by the National Authority.

22
 23

12. Sub-clause (1) of clause 22 empowers the Central Government to make rules in
consultation with the Comptroller and Auditor-General of India to stipulate the form in which
National Authority shall maintain its accounts and other relevant records and prepare an
annual statement of accounts.
13. Sub-clause (1) of clause 23 empowers the Central Government to make rules for
preparation of Annual Report by the National Authority.
14. Sub-clause (1) of clause 25 empowers the Central Government to make rules for
preparation of the budget for the next financial year showing the estimated receipts and
expenditure of the State Authority and forwarding the same to the State Government. Sub-
cause (2) of the said clause empowers the Central Government to make rules for financial
regulation and procedures for drawing up and implementing the budget of the State Authority.
15. Clause 26 empowers the Central Government to make rules for investments of
funds available in the State Funds.
16. Sub-clause (1) of clause 27 empowers the Central Government to make rules
regarding the manner in which each State Authority shall main proper accounts and other
relevant records and prepare annual statement of accounts by in consultation with Comptroller
and Auditor-General of India.
17. Sub-clause (1) of clause 28 empowers the Central Government to make rules
regarding the manner in which each State Authority shall prepare its annual report giving full
account of its activities during the previous financial year and forward a copy thereof to the
concerned State Government.
18. Sub-clause (1) of clause 33 empowers the Central Government to give directions to
the National Authority and each state authority as it thinks necessary.
19. The rules made and the notification issued, under the proposed legislation shall be
laid, as soon as may be, after they are made, or as the case may be, issued be laid before each
House of Parliament.
20. The matters in respect of which rules are to be made and notifications to be issued
are matters of procedure and administrative details and it is not practicable to provide for
them in the proposed legislation itself. The delegation of legislative power is, therefore, of a
normal character.
 Notes on Clauses
Clause 1.—This clause provides for the short title, extent and commencement of the
proposed legislation.
Clause 2.—This clause proposed to define various expressions used in the Bill.
Clause 3.—This clause seeks to provide for establishment of a non-lapsable, interest
bearing National Compensatory Afforestation Fund under public account of India. It seeks
to provide that the National Fund shall be under control of the Central Government, to be
managed by the National Authority. It further seeks to provide for transfer of funds placed
under the ad hoc Compensatory Afforestation Fund Management and Planning Authority
(CAMPA) to the National Fund. It also seeks to provide for transfer on yearly basis to the
National Compensatory Afforestation Fund by each State ten percent of amounts realised
from the user agencies in respect of the forest land diverted in their favour, which have been
credited directly into the State Compensatory Afforestation Fund under public account of
such State. It also seeks to provide for crediting into the National Fund other miscellaneous
amounts received by the National Authority.
Clause 4.—This clause seeks to provide for establishment of non-lapsable, interest
bearing State Compensatory Afforestation Fund under public account of each State. It
further seeks to provide that the State Fund shall be under the control of the concerned
State Government, to be managed by the State Authority of such State. Sub-clause (3)
seeks to provide for transfer of unspent balance of all monies which has been transferred by
ad hoc CAMPA to the State CAMPA constituted in such State in compliance of the guidelines
dated the 2nd July, 2009. It also seeks to provide for transfer of ninety per cent. of all the
monies collected by a State, which has been placed under the ad hoc CAMPA and the
interest accrued thereon, to State Fund of such State. It also provides for crediting into the
State Fund receipt of all monies from user agencies by such State for compliance of conditions
stipulated by the Central Government while according approval under the provisions of the
Forest (Conservation) Act, 1980.
Clause 5.—This clause seeks to provide for the manner of disbursement and utilisation
of monies available in the National Fund.
Clause 6.—This clause seeks to provide for the manner of disbursement and utilisation
of monies available in a State Fund.
Clause 7.— This clause seeks to provide for the accounting procedure to regulate the
manner of crediting the monies to the National Fund and State Fund in a year.
Clause 8.—This clause seeks to provide for the constitution of a National Authority
to be called the "National Compensatory Afforestation Fund Management and Planning
Authority" consisting of a governing body to be assisted by an executive committee,
monitoring group and administrative support mechanism for management and utilisation of
the National Fund. It futher seeks to provide for composition of governing body of the
National Authority. It also seeks to provide for the appointment of an officer of the rank of
an Additional Director General of Forests as the Chief Executive Officer of the National
Authority.
Clause 9.—This clause seeks to provide for the composition of the executive committee
and monitoring group of the National Authority. It further seek to provide for appointment
of other officials by the National Authority.
Clause 10.—This clause seeks to provide for the constitution, in each State and
Union territory , a State Authority to be called the "State Compensatory Afforestation Fund
Management and Planning Authority" consisting of a governing body to be assisted by an
executive committee, steering committee and administrative support mechanism for
24
 25

management and utilisation of the State Fund. It further seeks to provide for the composition
of governing body of the State Authority. It also seeks to provide for the appointment of an
officer not below the rank of a Chief Conservator of Forests as the Chief Executive Officer
of the State Authority.
Clause 11.—This clause seeks to provide for the composition of the steering committee
and executive committee of a State Authority. It further seek to provide for the appointment
of other officials by the National Authority.
Clause 12.—This clause seeks to provide that the terms of office and other conditions
of the service of the members of the National Authority, executive committee, monitoring
group, Chief Executive Officer and officials appointed by the National Authority, members
of State Authority, steering committee and executive committee of each State Authority
shall be such as may be provided by rules made by the Central Government under the
proposed legislation.
Clause 13.—This clause seeks to provide for the reasons for disqualification of a
person from being appointed as a member of the National Authority, executive committee
of the National Authority, a State Authority, steering committee and executive committee of
a State Authority, and monitoring group.
Clause 14.—This clause seeks to provide for powers and functions of the governing
body of the National Authority. It further seeks to provide that the governing body of the
National Authority shall meet at least once in six months. It also seeks to provide that the
governing body and executive committee of the National Authority and the monitoring
group of the National Authority shall meet 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 provided by rules made by the Central Government under the proposed legislation.
Clause 15.—This clause seeks to provide for the powers and functions of the executive
committee of the National Authority. It further seeks to provide that the executive committee
of the National Authority shall meet at least once in every three months.
Clause 16.—This clause seeks to provide for the functioning of monitoring group.
This clause provides that monitoring group shall evolve independent system for concurrent
monitoring and evaluation of the works implemented in the States and Union territories
utilising the funds released by the National Authority and State Authorities to ensure
effective and proper utilisation of funds by utilising the services of the regional offices, of
the Central Government in the Ministry of Environment, Forest and Climate Change. This
clause also provides that the monitoring group shall inspect and undertake financial audit
of works executed by utilising the funds released by the National Authority and State
Authorities in the State and Union territories. It further provides that monitoring group
shall meet at least once in three months.
Clause 17.—This clause seeks to provide for the powers and functions of the governing
body of the State Authority. It further seeks to provide that the governing body of a State
Authority shall meet at least once in six months. It also seeks to provide that the governing
body, steering committee and executive committee of a State Authority shall meet at such
places and shall observe such rules and procedures in regards to transaction of business at
its meeting, including the quorum there at, as may be provided by rules made by the Central
Government under the proposed legislation.
Clause 18.—This clause seeks to provide for the powers and functions of steering
committee of the State Authority.
Clause 19.—This clause seeks to provide for the functions and powers of the executive
committee of State Authority. It further seeks to provide that the executive committee of a
State Authority shall meet at least once in every three months.
Clause 20.—This clause seeks to provide for the preparation of budget for the next
financial year, showing the estimated receipts and expenditure of the National Authority
 26

and forwarding the same to the Central Government, in such form and at such time in each
financial year as may be provided by rules made by the Central Government under the
proposed legislation. It also seeks to provide that the National Authority shall adopt financial
regulation and procedures, in particular the procedure for drawing up and implementing the
budget of the National Authority as may be provided by rules made by the Central
Government under the proposed legislation.
Clause 21.—This clause seeks to provide that 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 be provided by rules made by the Central
Government under the proposed legislation.
Clause 22.—This clause seeks to provide for maintenance of accounts and audit of
the National Authority. It further provides that the National Authority shall maintain proper
accounts and other relevant records and prepare an annual statement of accounts in such
form as may be provided by rules made by the Central Government under the proposed
legislation in consultation with the Comptroller and Auditor-General of India. It also provides
that the accounts of the National Authority shall be audited by the Comptroller and Auditor-
General of India at such intervals as may be specified by him and any expenditure incurred
in connection with such audit shall be payable by the National Authority to the Comptroller
and Auditor-General. It also seeks to provide that the Comptroller and Auditor-General
shall, within a period of six months from the date of commencement of the proposed
legislation, audit the accounts of all the monies collected by the State Governments and
Union territory Administrations, which has been placed under the ad hoc authority and
submit the report to the Central Government.
Clause 23.—This clause seeks to provide for preparation and forwarding of a copy to
the Central Government, of the annual report of the National Authority, giving a full account
of its activities during the previous financial year.
Clause 24.—This clause seeks to provide for laying of a copy of annual report and
audit report of the National Authority together with a memorandum of action taken on the
recommendations contained therein before each House of Parliament.
Clause 25.—This clause seeks to provide for preparation of budget for the next
financial year, showing the estimated receipts and expenditure of a State Authority and
forwarding the same to the concerned State Government, in such form and at such time in
each financial year as may be provided by rules made by the Central Government under the
proposed legislation. It further seeks to provide that State Authority shall adopt financial
regulation and procedures, in particular the procedure for drawing up and implementing the
budget of the State Authority as may be provided by rules made by the Central Government
under the proposed legislation.
Clause 26.—This clause seeks to provide that State Authority may invest funds
available in the State Fund under public accounts of such State in the securities of the
Central Government and in scheduled banks in such manner as may be provided by rules
made by the Central Government under the proposed legislation.
Clause 27.—This clause seeks to provide for the maintenance of accounts and audit
of State Authority. It further provides that the State Authority shall maintain proper accounts
and other relevant records and prepare an annual statement of accounts in such form as
may be provided by rules made by the Central Government under the proposed legislation
in consultation with the Comptroller and Auditor-General of India. It also provides that the
accounts of the State Authority shall be audited by the Comptroller and Auditor General of
India at such intervals as may be specified by him and any expenditure incurred in connection
with such audit shall be payable by the State Authority to the Comptroller and Auditor-
General. It also seeks to provide that the Comptroller and Auditor-General shall, within a
period of six months from the date of commencement of the proposed legislation, audit the
accounts of all the monies which have been transferred by the ad hoc Authority to the
 27

State Compensatory Afforestation Fund Management and Planning Authorities constituted

in the States in compliance of the guidelines dated the 2nd July, 2009 and submit the report
to the State Government.
Clause 28.— This clause seeks to provide for the preparation and forwarding of a
copy to the concerned State Government of annual report of the State Authority giving a
full account of its activities during the previous financial year.
Clause 29.—This clause seeks to provide for laying a copy of the annual report and
audit report of the State Authority together with a memorandum of action taken on the
recommendations contained therein before each House of the State Legislature.
Clause 30.—This clause seeks to provide for making of rules, after previous
publication, by the Central Government for carrying out the purposes of the proposed
legislation. It further provides that every rule made under the proposed legislation shall be
laid, as soon as may be after it is made, before each House of Parliament, while it is in
session, for a total period of thirty days which may be comprised in one session or in two or
more successive sessions, and if, before the expiry of the session immediately following the
session or the successive sessions aforesaid, both Houses agree in making any modification
in the rule or both Houses agree that the rule should not be made, the rule shall, thereafter
have effect only in such modified form or be of no effect, as the case may be; so; however,
that any such modification or annulment shall be without prejudice to the validity of anything
previously done under that rule.
Clause 31.—This clause seeks to provide for the transfer and vesting of all the assets
and liabilities of the ad hoc Authority in the National Authority. This clause also provides
for the transfer and vesting of all the assets and liabilities of the State Compensatory
Afforestation Fund Management and Planning Authority constituted in such State in
compliance of guidelines dated the 2nd July, 2009 in the State Authority of the concerned
State.
Clause 32.—This clause seeks to provide that notwithstanding anything contained
in any judgment, decree or order of any court, the amount credited to the National Fund
shall be deemed to be credited and shall always be deemed to have been credited to the
public account of India within the meaning of articles 266 and 283 of the Constitution, and
it shall be regulated by law made by Parliament in this behalf. It further seeks to provides
that notwithstanding anything contained in any judgment or order of any court, all the
monies collected by the State Governments and the Union territory Administrations which
has been placed under the ad hoc Authority and deposited in the nationalised banks and
the interest accrued thereon shall stand transferred to the National Fund. It also seeks to
provide that notwithstanding anything contained in any judgment or any order of any
court, the amount credited to the State Fund shall be deemed to be credited and shall always
be deemed to have been credited to the public account of the State within the meaning of
articles 266 and 283 of the Constitution, and it shall be regulated by law made by the State
Legislature in this behalf.
Clause 33.—This clause seeks to provide for the power of the Central Government to
issue directions to the National Authority and each State Authority. It further seeks to
provide that the Central Government may, if it finds necessary or expedient in the public
interest, issue such policy directives to the National Authority or each State Authority, in
writing, in exercise of its powers or the performance of its functions under the proposed
legislation, and such policy directives shall be binding upon the National Authority, or as
the case may be, the State Authority. It also seeks to provide that the decision of the Central
Government, whether a question is one of policy or not, shall be final.
 LOK SABHA

————

BILL
to provide for the establishment of funds under the public accounts of India and the public
accounts of each State and crediting thereto the monies received from the user agencies
towards compensatory afforestation, additional compensatory afforestation, penal
compensatory afforestation, net present value and all other amounts recovered from
such agencies under the Forest (Conservation) Act, 1980; constitution of an authority
at national level and at each of the State and Union territory Administration for
administration of the funds and to utilise the monies so collected for undertaking
artificial regeneration (plantations), assisted natural regeneration, protection of forests,
forest related infrastructure development, Green India Programme, wildlife protection
and other related activities and for matters connected therewith or incidental thereto.

————

(Shri Prakash Javadekar, Minister of Environment, Forest and Climate Change)

GMGIPMRND—891LS—6-5-2015.