‘Lack of implementation capacity could affect fund use’ ‘The Bill may create unrest as land ownership is highly unregulated’

The Compensatory Afforestation Fund Bill is the latest legislative attempt to create a regime to apportion and utilise the ad hoc National Compensatory Afforestation Fund Management and Planning Authority (CAMPA) corpus, created by a Supreme Court order in 2004. The ~42,000-crore fund was created out of compensation levied against conversions of forest land for non-forest use under the Forest Conservation Act 1980. At present, 90 per cent of this fund is kept with the Centre, and only 10 per cent is disbursed to the states.

The first attempt at creating a law governing the CAMPA account came in the form of the Compensatory Afforestation Fund Bill 2008, which was passed by the lower House at the time, but lapsed before its passage through the upper House because of the dissolution of the 14th Lok Sabha. Background and key features of the Bill

Proposes establishment of a National Compensatory Afforestation Fund under the Public Accounts of India (which is to receive 10 per cent of the corpus) and State Compensatory Afforestation Funds under the public accounts of each (which are to receive the remaining 90 per cent of the corpus)

The funds are to receive payments for compensatory afforestation requirements due to loss of forest cover, net present value of forests as well as other project-specific requirements, in line with forest regeneration, wildlife protection and development of forest infrastructure

The management of these funds are to be made by establishing a permanent Compensatory Afforestation Fund Management and planning authorities at the national and state levels Issues identified by experts

A 2013 Comptroller and Auditor General report highlighted the lack of planning and implementation capacity possessed by states to carry out compensatory afforestation and forest conservation, which may affect the eventual efficacy of these funds

Procuring land for compensatory afforestation is difficult, and often hampered by unclear land titles and other procedural hurdles

The complex task of computing the net present values (which account for 51 per cent of the accumulated amount) have been left to the central government rendering fair determinations which are acceptable by states becoming a possible challenge The Benami Transactions (Prohibition) Amendment Bill, 2015, recently approved by the Cabinet seeks to amend the existing central law relating to benami transactions, The Benami Transactions (Prohibition) Act 1988. The implementation of the 1988 law sought to curb tax evasion and prevent unregulated and illegal use of property.

Background and key features of the Bill

First introduced before the Lok Sabha by Finance Minister Arun Jaitley on May 13, 2015

The Bill seeks to create a more inclusive statute by amending definitions of key terms and constituting specialised adjudicatory authorities to better regulate benami transactions

A “benami transaction”, currently defined as one where property is held or transferred by a person but paid or provided for by another, has been widened under the Bill to include properties purchased under fictitious names, situations where owners are not aware of their titles, and to cases involving untraceable persons who have provided consideration for purchases made

Subject to certain exceptions such as property owned by a member of a Hindu Undivided Family for the benefit of the family, a person holding property in a fiduciary capacity for another property owned by children or spouses, which are paid for by income of the parent or partner, all classes of property are now proposed to be subject to benami regulations

Under the Act, a singular authority was to be created by framing appropriate rules. The proposed Bill now envisages establishing a four-fold regulatory mechanism consisting of an initiating officer, an approving authority, an administrator and an adjudicatory authority

The Bill enhances penalties for entering into benami transactions (up to seven years of imprisonment), or for providing false information to authorities (up to five years in jail)

The amendment also introduces an appellate tribunal to act as an additional mechanism for appeal, prior to the high court jurisdiction Issues identified by experts

May create unrest in large parts of the country where land ownership and utility is still highly unregulated

No provision for a compliance window to regularise prior benami transactions

Though there is a provision for protection of bonafide buyers of benami property, the same has not been extended to corporate entities

Confiscated properties are to rest with the central government, even though land is a state subject under the Constitution