Chapter II ESTABLISHMENT, MANAGEMENT AND UTILISATION OF NATIONAL COMPENSATORY AFFORESTATION FUND AND STATE COMPENSATORY AFFORESTATION FUNDS

(1) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf, there shall be established for the purposes of this 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. (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, 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; (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 rate declared by the Central Government on year to year basis.

(1) With effect from such date as each State Government may, by notification in the 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: Provided that in case of Union territory having no legislature, such fund shall be established under the public account of Union of India with effect from such date as the Union territory Administration may, by notification in the Official Gazette, appoint in this behalf. (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 of a State— (i) the unspent balance of all monies which has been transferred by ad hoc Authority to the State Compensatory Afforestation Compensatory Afforestation Funds 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) all monies realised from user agencies by such State towards compensatory 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 provisions of the Forest (Conservation) Act, 1980 (69 of 1980); and (iv) the funds recoverable from user agencies by such State in cases where forest land diverted falls within the protected areas, that is, areas notified under sections 18, 26A or 35 of the Wild Life (Protection) Act, 1972 (53 of 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; (ii) any loan taken or any borrowings made by the State Authority; (iii) any other sums received by the State Authority by way of benefaction, gift or donations. (5) The monies received in the State Fund shall be an interest bearing fund under public accounts. (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.

Save as otherwise provided in this Act, the monies available in the National Fund shall be disbursed and utilised in the following manner, namely:— (a) ninety per cent. of the all monies collected by a State, which has been placed 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 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 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 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.

Save as otherwise provided in this Act, the monies available in a State Fund shall be disbursed and utilised in the following manner, namely:— (a) the money received for compensatory afforestation, additional compensatory afforestation, penal compensatory afforestation, catchment area treatment plan and 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 monies received towards net present value and penal net present value shall be used for artificial regeneration (plantation), assisted natural regeneration, forest management, forest protection, forest and wildlife related 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, which 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 of the Wild Life (Protection) Act, 1972 (35 of 1972) or the orders of the Supreme Court involving cases of 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 State including facilitating voluntary relocation from such protected areas and in exceptional circumstance, a part of the corpus may also be used subject to prior approval of the National Authority; (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 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, if found expedient and necessary by the National Authority, it may, in consultation with the concerned Sate 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 instalments as per the annual plan of operation finalised by steering committee of such State Authority and executive committee of the National Authority.

The accounting procedure to regulate the manner of crediting the monies to the National Fund and State Fund in a year shall be in such manner as may be prescribed.