Forests are indispensable for sustaining life on Earth, providing essential ecosystem services and supporting the livelihoods of millions of people. However, increasing human demands over the years have led to the deterioration of forests to meet those needs. As development is an inevitable aspect for a developing nation like India, it has become crucial to establish a system that balances development and conservation by assessing whether the loss of forests is justified and, if so, determine ways to mitigate or compensate for the loss.

A notable initiative by the Government of India in this context is the 'compensatory afforestation' that frequently makes headlines due to its large-scale figures and the concerns it raises about its success in achieving its intended goals.

The Land Resources Division of TERI conducted a study supported by The Infravision Foundation (TIF) to evaluate the implementation of compensatory afforestation in India. This study aimed to identify challenges, address gaps, and propose actionable solutions. The study included an extensive desk review of the existing acts, rules, guidelines and handbooks, alongside research papers, news articles and data available on various dedicated platforms. The findings were validated using remote sensing and discussions with subject-matter experts.

In October 1980, the Government of India enacted the Forest (Conservation) Act (FCA). It aimed at keeping a check on the alarming rate of forest land diversion in India. The basic objective of the Act is to regulate the indiscriminate diversion of forest lands for non-forestry uses and to maintain a logical balance between the developmental needs of the country and the conservation of natural heritage. Prior to 1980, the rate of diversion of forest lands for non-forestry purposes was about 1430 sq. km per annum but, with the advent of the FCA, 1980, the rate of diversion of forest lands has come down to around 150 sq. km per annum (MoEFCC).

Compensatory afforestation is a key aspect of regulating the diversions which implies, 'afforestation done in lieu of the diversion of forest land for non-forestry use under the Forest (Conservation) Act, 1980'. It encompasses more than just afforestation; including the compensation for ecosystem services lost as well. Though the process of compensation was put in place with rules for land identification and fund collection for plantation and forest conservation activities, the problem arose when the funds collected against land diversion was not wisely spent for forest conservation activities. As a result, the Supreme Court of India notified the creation of the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) for better management and utilization of funds. However, until CAMPA came in place, a proxy body known as Ad-hoc CAMPA was operationalized. State CAMPA guidelines were also issued in 2009 which established a three-tier structure for fund management, involving a governing body, Steering Committee, and Executive Committee.

Despite these measures, a 2013 audit by the Comptroller and Auditor General (CAG) highlighted significant issues in the implementation of compensatory afforestation, including the underutilization and unauthorized use of funds, as well as improper processing of proposals. These problems were largely attributed to the absence of an efficient system for fund utilization. Hence, the Compensatory Afforestation Fund Act (CAF) was enacted in 2016, with its rules introduced in 2018, establishing dedicated funds and authorities such as National CAMPA and State CAMPA to strengthen the system. In accordance with the Act, an amount of INR 72,112.84 crore, collected towards compensatory levies was disbursed to 33 states/UTs who have established their State Funds (National CAMPA). To improve transparency and accountability, initiatives such as e-Green Watch were developed for monitoring and evaluating afforestation efforts, while the Parivesh portal was launched to digitalize and streamline the approval process for forest land diversion proposals.

Various articles and newspaper headlines often equate this concept to 'offsetting' or 'green washing', however, a thorough examination of the rules and guidelines reveals that the programme's primary intent is genuinely aimed at conservation. The CAMPA has played a vital role in ecosystem conservation and sustainability, addressing critical areas that would otherwise face challenges in securing financial resources. The National Authority has approved Annual Plan of Operations (APOs) of states/UTs with amount of INR 27,093.92 crore from 2018–19 to 2021–22, out of which an amount of INR 16,753.48 crore have been utilized by the state/UT authorities for implementation of CAMPA activities. Additionally, till 2022, the total of 9,58,360.85 hectares (88.39%) of Compensatory Afforestation (CA) has been completed against the target of 10,84,220.90 hectares (National CAMPA).

In this study, the states and UTs of India were ranked based on indicators like year of notification of State CAMPA, public transparency of documents, targets achieved from 2016 to 2023, forest area, area of land diverted, compensatory afforestation land identified, and plantation works done in the state. This was followed by identifying challenges in implementation and doing detailed analysis for Haryana, Odisha, and Uttarakhand.

Despite the timely advancements, the implementation has been subject to criticism from various media outlets and publications, often overlooking the complexities and pressures involved in managing such a large-scale and intricate system. The challenges exist not in the well-thought policy and law but in its execution, in an efficient manner.

One of the significant challenges in compensatory afforestation in India is finding appropriate land parcels for plantation. For example, in Jharkhand, the land identified for afforestation exceeds the diverted forest land by over 500 sq. km, whereas in Uttarakhand, the land identified is 200 sq. km less than the area diverted. While non-forest land is often scarce in states with significant forest cover, the strategy of inter-state compensation—where forest losses in one state are compensated through plantations in another—fails to fully replace the ecological and social value of the lost forests. For instance, in Rajasthan, the amount of plantation work exceeds the extent of forest land diverted, even though the state has seen relatively less forest diversion. While Rajasthan offers non-forest land for the plantation activities, its arid climate and unique ecology cannot replicate the ecosystems and biodiversity lost in states with higher-quality forests, such as Uttarakhand while also impacting the original ecology of Rajasthan's desert ecosystem.

Another challenge in identifying suitable land is the vastness of required area. Large patches of forest land are often cleared for development, but in return, afforestation efforts tend to be scattered across small, fragmented parcels of land. While these efforts compensate for the number of trees cut, they fail to replicate the ecological benefits of large, contiguous forest areas. Moreover, the term 'compensation' is not accurate in the context of compensatory afforestation, as challenges such as land scarcity and fragmentation render it almost impossible to recreate a forest equivalent to the one that has been deforested.

In addition to ongoing challenges in maintaining forest quality, the efficiency of the system is further compromised by a lack of transparency and data discrepancies. The National CAMPA website is often inaccessible, and at the state level, only six states—Uttarakhand, Uttar Pradesh, Telangana, Odisha, Jammu & Kashmir, Delhi, and Haryana—have dedicated websites for their records. Several states, including Bihar, Kerala, and Punjab, as well as most UTs, lack an online presence for CAMPA activities. Moreover, data inconsistencies across various platforms and documents, coupled with inaccuracies in data uploads, often create a misleading picture of the extent of CAMPA activities.

Since June 28, 2022, a total of 3,359 projects have received in-principle approval, out of which 1,832 projects have been granted final approval within a span of two and half years as on 15 January 2025 (Parivesh). Such rates of approvals of forest diversion under the Act reflects a prioritization of development over forest conservation. A large portion of these projects involve constructing roads, bridges, and access routes, which create linear structures that fragment forests, disrupt habitats, and contribute to biodiversity loss.

As relaxation is provided to central and state public undertakings, compensatory afforestation is frequently carried out in degraded forests rather than non-forest land, especially in states with extensive areas of open forest such as Haryana and Rajasthan. Furthermore, the modifications to the Forest (Conservation) Act in the name of simplification raises serious concerns about its long-term efficacy in safeguarding India's forests as more relaxations are introduced for certain projects along with exclusion of lands under the purview of the Act. While some projects are indeed essential, forest conservation cannot continually be compromised for development.

Despite the challenges, the compensatory afforestation programme holds immense potential for contributing to India's climate goals, forest conservation efforts, and biodiversity preservation. To unlock this potential, it is essential to address the gaps between policy and practice.

Evaluating the economic impact of land diversion by comparing the value of forest land and its services against the socio-economic costs of the proposed project could be crucial in determining and prioritizing only the most essential projects.

Establishing baseline and revising it periodically is essential to assess the balance between forest loss due to diversion and conservation efforts funded through CAMPA. Strengthening inter-state coordination can help address the land scarcity problem, while the creation of land banks for degraded lands can provide additional space for afforestation activities. Revising net present value (NPV) rates to accurately reflect ecosystem service losses will ensure that financial compensations align with environmental realities. Improving fund utilization through better planning, capacity-building initiatives, and timely fund disbursement will enhance the efficiency of forest departments.

Monitoring activities executed through CAMPA funds must be robust and include biodiversity assessments and impact evaluations to track changes and progress from the baseline. Additionally, the data management system must be upgraded to ensure accuracy while validating data on different portals, promoting transparency and reliability in the information presented.

With a more effective implementation strategy, compensatory afforestation can serve as a powerful tool for channelling funds into forest conservation efforts. It can also play a pivotal role in uplifting communities, both directly and indirectly, by promoting sustainable development that benefits the masses. If managed properly, this mechanism could ensure that not only are forests regenerated but foster long-term environmental and societal well-being. #