Section 4 of CAF Act : Section 4: Establishment Of State Fund

Explanation using Example

Let's consider the hypothetical scenario of the state of 'X'. The state government of 'X' decides to establish a special fund called the "State Compensatory Afforestation Fund - X" under its public accounts. This decision is made official by a notification in the Official Gazette.

Now, this fund is under the control of the state government of 'X' and it is managed by the State Authority of 'X'. The fund will include the unspent balance of all monies transferred by the ad hoc Authority to the State Compensatory Afforestation Funds Management and Planning Authority in 'X' in compliance with guidelines dated 2nd July, 2009.

Also, all monies transferable from the National Fund under clause (a) of section 5 will be credited into this fund. Additionally, any money realized from user agencies in 'X' towards 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 approving under the provisions of the Forest (Conservation) Act, 1980 will also be credited to this fund.

Moreover, the funds recoverable from user agencies in 'X' 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 for undertaking activities relating to the protection of biodiversity and wildlife, will also be credited into this fund.

The state government of 'X' may also credit to this fund any grants-in-aid received by the State Authority, any loan taken or any borrowings made by the State Authority, and any other sums received by the State Authority by way of benefaction, gift or donations.

This fund will be an interest bearing fund under public accounts. The balance in this fund shall be non-lapsable and will earn interest as per the rate declared by the Central Government on a year to year basis.