Union government removes financial and ecological obligations on private plantations in forest areas

The central government has amended forest conservation rules to allow private entities to undertake commercial plantations in forest areas without paying long-standing environmental levies, a move that has raised concerns among former forest officials, environmentalists and tribal rights groups.

The change, notified by the Union Ministry of Environment, Forests and Climate Change (MoEF&CC), allows assisted natural regeneration, afforestation and plantations carried out by government or non-government entities to be treated as “forestry activities”. As a result, such projects will no longer require payment of Net Present Value (NPV) and the creation of compensatory afforestation plots.

NPV is a one-time charge levied on users diverting forest land, based on a scientific calculation of the value of ecosystem goods and services such as clean air, water, and biodiversity. The value is compensated through artificial regeneration, protection, and the prevention of pests and diseases, among other activities. Such plantations will now be considered as forestry activity. 

The amendment has been made under the Van (Sanrakshan Evam Samvardhan) Adhiniyam, 2023, formerly the Forest Conservation Act, through changes to the consolidated guidelines originally notified on November 29, 2023. The revised provision was approved by the ministry on January 2, 2026.

Under the amended rules, plantations undertaken with the agreement of state governments, in line with approved working or management plans and under the supervision of state forest departments, will be deemed forestry activities. Consequently, the guidelines state, the requirements of compensatory afforestation and NPV payments “shall not be applicable”.

The amendment also gives state governments discretion to design frameworks for the utilisation of such plantations and to decide revenue-sharing arrangements on a case-by-case basis.

A further section specifies that afforestation or plantation projects must be permitted by states or union territories through a Detailed Project Report (DPR), aligned with working plan provisions and approved by a competent authority. The DPR must outline details such as the area covered, species proposed, plantation activities and sustainable harvest levels.

“Provided further that afforestation/plantations should be allowed by the state/Union territories in accordance with a DPR to be prepared in consonance with provisions of the Working Plan and approved by the competent authority specifying the detail viz. extent of area, species proposed for plantations, activities proposed, silviculturally available sustainable harvest for utilisation, etc,” the amendment stated. 

Conservationists warn of negative impacts

Environmental experts, however, warn that the move could weaken safeguards for forest conservation.

Prakriti Srivastava, former principal chief conservator of forests in Kerala, said waiving NPV and compensatory afforestation would result in a loss of conservation funding and forest land.

“Under the earlier provisions, leasing out forest land was considered a non-forestry activity, for which payment of NPV and compliance with compensatory afforestation were mandatory,” she said. “With these requirements now eased, private entities stand to benefit by using forest land for plantations and earning profits without corresponding obligations for environmental protection.”

Srivastava said the amendment places responsibility on state governments to create mechanisms to regulate the scheme but raises questions about accountability. “Who will decide the framework, and how will environmental protections be ensured,” she asked.

The policy shift has revived a debate dating back more than three decades, as reported by Down To Earth (DTE), when proposals were made to lease large tracts of degraded forest land to private companies to meet India’s growing demand for paper and timber.

At the time, a plan to lease around 2.5 million hectares of degraded forest land for 30 years — with provisions for renewal — was placed before the Cabinet Committee on Economic Affairs. Private industry groups supported the move, arguing it would boost plantation forestry and reduce imports.

Environmentalists and tribal rights advocates opposed it, warning that large-scale commercial plantations would threaten forest-dependent livelihoods, village commons and the country’s ecological security.

Y Giri Rao, executive director of the Odisha-based non-governmental organisation Vasundhara, said the current amendment presents both opportunities and risks. “The policy supports restoration by exempting sustainable plantations from compensatory afforestation and NPV, potentially accelerating regeneration on degraded forest land under state oversight,” he said. “But risks include excessive leasing if DPRs lack rigour, monoculture plantations displacing native biodiversity, or weak supervision leading to degradation rather than enhancement.”

Rao added that the impact on tribal and forest-dwelling communities would depend heavily on implementation. Easier leasing could create livelihood opportunities through revenue sharing from timber or non-timber forest products, he said, but only if states ensure community participation in line with the Forest Rights Act of 2006.

“The downsides could include shrinking village commons, displacement from leased areas, restricted access to minor forest produce or grazing, and exclusion if agreements favour external entities without Gram Sabha consent,” he told DTE.

Giri clarified that what the ministry is stating is that much of the degraded forest land is under the occupation of local communities. “Without recognising these occupations under the Forest Rights Act (FRA), this could create significant problems,” he said.

Srivastava compared the amendment to the government’s Green Credit Programme, introduced in October 2023, which allows private entities to undertake tree plantations on identified degraded land in exchange for tradeable green credits.

Touted by the government as a market-based mechanism to increase green cover, the programme has also drawn criticism from environmental groups, who argue that it prioritises ease of business over ecological integrity and community rights.