How Will Compensatory Afforestation Fund Bill Reform Real Estate?

On May 3, when the Lok Sabha took up the Compensatory Afforestation Fund Bill, 2015 for discussion, the House saw the ruling Bharatiya Janata Party (BJP) and Opposition parties in consonance with each other — an unusual sight in Parliament. Prakash Javadekar, then the Union environment minister — he has since moved to the human resource development ministry and Anil Madhav Dave has taken charge of the environment ministry — gave a big round of applause in support. 

The Bill was expected to be taken up by the Rajya Sabha for discussion on July 25, but this could not happen amid a furore over the stalled Private Member's Bill on a Special Package for Andhra Pradesh. Environment Minister Dave accused the Opposition of blocking the Compensatory Afforestation Fund Management and Planning Authority Bill, popularly known as CAMPA. But Jairam Ramesh, an environment minister during the Congress rule, clarified that his party was not against the Bill, but it wanted an amendment so that the funds could be used only after the consent of the Gram Sabhas.

But why is the Bill so important? PropGuide explains the key features of the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) Bill:

• The legislation: The Bill has six chapters that deal with “establishment, management and utilisation” of the national/state compensatory afforestation fund, their constitution, powers and functions and how the accounts will be managed. The Bill also talks about setting up of a national-level authority, and one authority in each of the states and Union territories across the country, to utilise the fund for undertaking artificial regeneration, protection of forests and forest-related infrastructure development.

• The fund: Clause 3 of the Bill talks about setting up of a public account non-lapsable and interest-bearing National Compensatory Afforestation Fund, which will be under the Central government. Funds that will be collected by the ad hoc Compensatory Afforestation and Fund Management and Planning Authority (CAMPA) will be transferred to the national fund.

• Who gets what? On a yearly basis, 90 per cent of the funds collected by a state will be given to it along with interest, while the remaining 10 per cent will go to the national fund.

• The rational balance: According to the Bill, the Forest Conservation Act, 1980, was enacted to maintain a “rational balance between conservation and development”, as the diversion of forest land for non-forest purposes was causing heavy losses. The Bill talks about promoting additional plantation activities so that development and forest conservation remain in complete harmony. 

• Investment of funds: Under Clause 21 of the Bill, the national authority can invest its funds in Central securities of scheduled banks.

How will CAMPA impact real estate when it becomes an Act?

• Construction in a responsible way: Despite the noise around forest conservation and keeping the green cover intact, reckless construction activities across the country have been causing a huge damage to the environment. CAMPA will ensure construction is done responsibly, both at the central and state levels.

• Utilisation of funds: The Rs 41,000-crore fund set aside for forest conservation activities in 2012-13 has been lying idle, while large-scale urban development activities have seen the country's green cover reducing sharply. According to a World Bank report in 2014, Indian cities were among the most polluted in the world. The new legislation would be instrumental in improving things on this front.

• Minimum displacement: The Bill, through public participation, will ensure large-scale displacements are kept at the minimum. A social audit of funds will also ensure money is being spent in the right direction.

• Job creation: Once the Bill becomes an Act, it would also generate a lot of jobs in the system.