Environment Ministry rejects plea for exemption from forest penalty

News: The Ministry of Mines has requested the Environment Ministry to exempt it from paying Net Present Value(NPV) for digging exploratory boreholes in forests.However, the Environment Ministry has refused saying that it would be ‘inappropriate’ to grant such an exemption as this was mandated by the Supreme Court.


  • Net Present Value(NPV): It is a monetary approximation of the value that is lost when a piece of forest land has been razed.
  • Who developed it?: It was developed by a committee led by Professor Kanchan Gupta of the Institute of Economic Growth based on the mandate of the Supreme Court.
  • How is it calculated? It is calculated on the basis of the services and ecological value and there are prescribed formulae for calculating this amount which depends on the location and nature of the forest and the type of industrial enterprise that will replace a particular parcel of forest.
  • Who decides NPV? The Forest Advisory Committee constituted by the Ministry of Environment, Forest and Climate Change (MoEF&CC) decides on whether forests can be diverted for projects and the NPV to be charged.
  • How are they used? They are used for conservation efforts like mitigating wildlife loss and biodiversity projects through the Compensatory Afforestation Fund.

Additional Facts:

  • Forest Advisory Committee: It is a statutory body constituted by the Forest (Conservation) Act 1980.It comes under the Ministry of Environment, Forests & Climate Change(MoEF&CC).
  • Purpose: It is an advisory body that considers questions on the diversion of forest land for non-forest uses such as mining, industrial projects, townships and advises the government on the issue of granting forest clearances.