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Rs 50,000 crore green fund stuck in turf war between environment and finance ministries

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Environment ministry is worried that the fund meant for restoring India’s forest cover could be diverted by the government to meet other expenses.

New Delhi: A nearly-Rs 50,000 crore green fund meant to help India restore its forest cover is caught in a turf war between the Union Environment and Forests ministry and the Finance ministry, hurting the implementation of a critical environment protection law.

Nearly two years after the Compensatory Afforestation Fund Management and Planning Act (CAMPA) 2016 was passed by Parliament, the rules to the act which are essential to its implementation are yet to be notified.

Reason: the disagreement between the ministries over where the cash rich fund should be kept – the Consolidated Fund of India (CFI) or the Public Account of India – and how it should be routed for allocation to the states.

Although the draft CAMPA rules are expected to be placed in the public domain this month, it is not likely to specify this critical financial procedure on the fund route, ThePrint has learnt.

The environment ministry is concerned that parking this huge fund in the CFI or even routing it through the CFI could open it to possible diversion for government expenditure other than greening the country.

While the Finance ministry is now agreeable to the funds being parked in the Public Account, it has cited accounting procedures to argue that it should be routed to the Public Account via the CFI.

But the Environment ministry is concerned about how long these funds will be held back in the CFI and wants assurances built in for the funds to be immediately transferred to the public account.

Environment ministry sources said that even if the amount has to be ultimately routed through the CFI, as the finance ministry says, a clause should be brought in clearly stating that the fund will be used for no other purpose except compensatory afforestation even while it is held in the CFI.

Reached by ThePrint for comment, the Finance ministry said that it was agreeable to the money being kept in the Public Account and the Environment ministry should notify the Rules in keeping with accounting methods.

“There is a certain accounting method for deposit and expenditure from Public Account and it is approved by CAG (Comptroller and Auditor-General) and CGA (Controller General of Accounts),” the Finance ministry said in response to queries from ThePrint.

“The funds in Public Account will be non-lapsable and utilised as per requirement by the MOEFCC (Ministry of Environment, Forest and Climate Change) for which amount will be reflected in demand for grants of the ministry. The accounting method had approval of CAG and MOEFCC should notify the rules as it is totally in conformity with the act.”

What’s the difference?

There’s good reason for the CFI versus Public Account debate.

All taxes flow into the CFI, and it is from here that the government meets its expenditures with parliamentary approvals. Public Account, on the other hand, does not involve revenues or debt of the government, and its expenditure is not bound by legislative approval. Provident funds and small savings are parked in the Public Account.

It is learnt that the finance ministry has argued that except General Provident Fund-related monies, there is no precedent of any other fund being held in the Public Account, and hence there is no case for CAMPA funds to be moved there either.

The environment ministry, on the other hand, pointed out that the CAMPA itself clearly states that it is “an Act to provide for the establishment of funds under the public account of India and the public accounts of each state”. Even the CAG had earlier advocated transferring the amount to the Public Account for expeditious disbursal and timely utilisation. This has, in fact, been the government position on the issue so far.

The deadlock also has an impact on ground. The adhocism in disbursal of the green funds to states continues, even though Parliament passed an act to end it in July 2016. State CAMPAs currently receive only 10 per cent of funds to use for afforestation and forest conservation, as against the act’s promise of 90 per cent.

The Haryana government, for instance, recently raised the issue, demanding greater funds for increasing the state’s forest cover – something which requires the notification of the CAMPA rules.


CAMPA funds are aimed at restoring the forest cover of the country, which may have been affected due to forest land diversion for various activities ranging from mining to road construction and other projects.

In 2002, taking cognisance of the heavy underutilisation of funds collected for afforestation by states, the Supreme Court ordered the creation of a central Compensatory Afforestation Fund. States also set up their own CAMPAs thereafter, but in 2013, a CAG report observed that funds were still unutilised.

Finally, a bill was brought in and passed in 2016 to end the adhocism and set up a permanent institutional mechanism for the same.

The CAMPA seeks to transfer these amounts to dedicated, non-lapsable interest-bearing funds under the Public Account of India and each state, so as to bring these funds within the overall oversight and control of Parliament and state legislatures, without impairing easy availability of these funds.

As per the Act, 90 per cent of the fund is to be transferred to the states for the creation and maintenance of compensatory afforestation and execution of other activities for conservation, and the remaining 10 per cent amount is to be retained at the national level for monitoring and evaluation.

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  1. Absolutely the right thing to do. Next, all monies collected in the form of a ” cess ” should also be firewalled from the Consolidated Fund and spent, without annual lapsing, for the designated purpose. Drafting the necessary Rules for this purpose is a minor detail.

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