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To settle turf war over green funds, environment ministry to seek CAG opinion

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Environment and finance ministries are locked in a tussle over financial procedure, and the rules notified by the former are silent on the issue.

New Delhi: The Union Ministry of Environment and Forests will seek the opinion of the Comptroller and Auditor General in its tussle with the finance ministry over the Rs 50,000 crore fund for afforestation.

While the environment ministry notified the draft rules for implementing the Compensatory Afforestation Fund Management and Planning Act, 2016, (CAMPA) on 16 February 2018, it has omitted the mention of the financial procedure involved, on which it will seek the CAG’s opinion, ThePrint has learnt. CAMPA funds are aimed at restoring forest cover in the country.

Highly-placed sources said a meeting is planned with the CAG on the issue in the first week of March to work out the mechanism for allocation of the funds.

“It is felt that CAG opinion on this may bring more clarity to the issue, as it is an unprecedented situation. We only want to ensure that the fund is used for the purpose of increasing India’s forest cover as envisaged,” a government official well-versed with the issue said.

“We are certain that we will be able to finalise the financial procedure by the time that the draft rules come into effect,” he said. The draft rules will come into effect a month from now.

Tussle between the ministries

The green ministry has been locked in a tussle with the finance ministry over where the 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 states. 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.

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. While all taxes flow into the CFI and it is from here that the government meets its expenditures with parliamentary approvals, provident funds and small savings are parked in the Public Account, and its expenditure is not bound by legislative approval.

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

The environment ministry, however, is concerned about how long will they be held back in the CFI and wants assurances built in for immediate transfer to the public account, so that that the fund is not used for any purpose other than compensatory afforestation.

The draft rules notified last week only mention that “the national fund shall be managed according to the provisions of Government Accounting Rule 1990 and the General Financial Rules 2017, as applicable from time to time”.

Impact of the deadlock

The deadlock has also had an impact on ground. The adhocism in disbursal of the green funds to states continues, even though Parliament passed the CAMPA in July 2016. State bodies 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.

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 leading to the CAMPA in 2016.

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