CENTRAL EMPOWERED COMMITTEE
SUPPLEMENTARY REPORT IN IA NO. 826 IN IA NO. 566 REGARDING CALCULATION OF NET PRESENT VALUE (NPV) PAYABLE ON USE OF FOREST LAND OF DIFFERENT TYPES FOR NON-FOREST PURPOSES
This Supplementary Report is being
filed by the CEC pursuant to this Hon’ble Court’s order dated 28.11.2006 in IA
No. 826 in IA No. 566 after considering the technical inputs provided by the
Forest Survey of India, Ministry of Environment & Forests and after
discussing the matter with the Chairman and Members of the Kanchan Chopra
Committee, the Director General of Forests, the Inspector General of Forests
(FC) and other officials of the MoEF. A copy of the record of discussions held
with the Kanchan Chopra Committee on 14.12.2006 is enclosed at ANNEXURE-RS-I to this report.
FOREST TYPE-WISE
2. The Forest Survey of India, has since last
two decades, been undertaking forest cover mapping of the country biennially
using satellite data obtained from the NRSA, Hyderabad. The methodology of
mapping involves the geo-rectification of the satellite imagery using the
Survey of India toposheets followed by the digital interpretation of the same
and extensive ground truthing. The forest cover maps depict three tree canopy
density classes viz very dense (>70% crown density), moderately dense
(40-70% crown density) and open (10-40% crown density). The last assessment of
the forest cover in the various States / UT’s of the country was done by the
Forest Survey of India in the year 2003, in which IRS 1D LISS III satellite
data with spatial resolution of 23.5 m was used. The details in this regard is
enclosed at ANNEXURE-RS-II to
this report. A copy of the Forest Cover Map of India prepared by the FSI is
enclosed at ANNEXURE-RS-M-I
to this report. As an illustration, the Forest Cover Map of the State of
3. Champion & Seth have classified
the forests of
(i) Tropical Wet Evergreen Forests
(ii) Tropical Semi-Evergreen Forests
(iii) Tropical Moist Deciduous Forests
(iv) Littoral and Swamp Forests
(v) Tropical Dry Deciduous Forests
(vi) Tropical Thorn Forests
(vii) Tropical Dry Evergreen Forests
(viii) Sub-tropical Broad Leaved Hill Forests
(ix) Sub-Tropical Pine Forests
(x) Sub Tropical Dry Evergreen Forests
(xi) Montane Wet Temperate Forests
(xii) Himalayan Moist Temperate Forests
(xiii) Himalayan Dry Temperate Forests
(xiv) Sub Alpine Forest
(xv) Moist Alpine Scrub
(xvi) Dry Alpine Scrub
This classification of forest types has wide acceptability throughout the world and matches well with the many ecological classifications followed by the international organizations as well as other countries.
4. The map showing forest type zones of major groups of the forest types as classified by Champion & Seth was geo referenced and digitized. A small inaccessible area of the country and the area of the State of Sikkim, which was not classified by Champion & Seth, have been assigned the appropriate forest type based on its features. Using the mosaic of forest cover of the entire country, the geo-rectification of the digitized forest type map was further improved using the map-to map rectification method. A copy of the digitized map of the “Forest Type Zones of India” based on Champion & Seth Classification is enclosed at ANNEXURE-RS-M-III to this report.
5. The raster GIS analysis of the two layers
i.e. the “Forest Cover Map” and the “Forest Type Zones Map” was done for
generating a map showing the forest cover in different forest types. The
corresponding area figures were also generated in the GIS analysis. A copy of
the map showing forest type-wise details of the forest cover in the country is
enclosed at ANNEXURE-RS-M-IV
of this report. As an illustration two maps showing forest type-wise details of
the forest cover one for the State of
ECO-VALUE CLASSES OF FORESTS
6. It is submitted that the classification of Forest Types of India’s forests by Champion and Seth was done for silvicultural works particularly applied for the management of forests under working plans. The major basis of classification included the climate, the soil and the past treatment as these factors determine the vegetation type of a given locality. Subsequently, the other ecological parameters, that is the physiognomy, the structure, function, floristics and dynamics of vegetation etc. were used for further classification of forests into types and sub-types. The 16 major Forest Types of India have been sub-divided into 221 types and sub-types.
7. Generally, the ecological
classifications have broader range because climate is chosen as a primary
factor of classification and has a very wide canvas. The physiography (lowlands
and mountains) and soil become subsidiary to the climate. Thus, from the point
of view of the ecological role and value of the forests, which is different
from the management perspectives and silvicultural requirements, the Forests
Types of India can be grouped into broad ecological classes. For the purpose of
this report, the 16 major Forest types have been grouped into the following 6
ecological classes depending upon their ecological functions. This
classification is based on experience and judgment and therefore is not very
rigid.
|
Eco-class I |
- |
Consisting of Tropical Wet Evergreen Forests,
Tropical Semi Evergreen Forests and Tropical Moist Deciduous Forests |
|
Eco-class II |
- |
Consisting of Littoral and Swamp Forests |
|
Eco-class III |
- |
Consisting of Tropical Dry Deciduous Forests |
|
Eco-class IV |
- |
Consisting of Tropical Thorn Forests and Tropical
Dry Evergreen Forests |
|
Eco-class V |
- |
Consisting of Sub-tropical Broad Leaved Hill
Forests, Sub-Tropical Pine Forests and Sub Tropical Dry Evergreen Forests |
|
Eco-class VI |
- |
Consisting of Montane Wet Temperate Forests,
Himalayan Moist Temperate Forests, Himalayan Dry Temperate Forests, Sub
Alpine Forest, Moist Alpine Scrub and Dry Alpine Scrub |
8. The details of very dense forest, dense
forest, open forest and scrub land falling in different Eco-Value Classes in
the country are enclosed at ANNEXURE-RS-V to this report. Similar details can be compiled for any specific area
with the help of its co-ordinates. A note on “Eco-Classes composition and other
relevant details” is enclosed at ANNEXURE-RS-VI to this report.
EQUALIZATION VALUE OF FORESTS
9. Based on the ecological importance of
forest falling in different eco-value and canopy density classes, relative
weightage factors have been assigned to them (ANNEXURE-RS-VII). It may be clarified that these values have also
been assigned on the basis of value judgement and experience. By using these
relative weightage factors, the equalized forest area in eco-value Class I and
very dense forest corresponding to forest falling in different eco-value and
density classes have been compiled (ANNEXURE-RS-VIII). For example, 17,997 sq.km. of open forest of
Eco-Class IV has been calculated to be equivalent to 7,558 sq.km. of very dense
forest of Eco-Value Class I i.e. the ecological value of 17,997 sq.km. of this
forest is taken to be same as that of 7,558 sq.km. of forest having highest
ecological value i.e. very dense forest in Eco-Value Class I. Accordingly, the
entire forest area of the country has been calculated and found to be
equivalent to 5.2 lakh sq.km. forest area having highest ecological
significance as that of forest falling in eco-value Class I with density above
70%. The equalization factor, which is obtained by dividing the total forest
area with the equalized forest area, comes to 1.3042. This factor, multiplied
with the average NPV per ha. and with the relative weightage factor, provides
the NPV of forest falling in a specific eco-value.
AVERAGE NET PRESENT VALUE PER HECTARE OF
10. For calculating the average Net Present
Value per ha. of forest in
(i)
Value of timber and
fuel wood
(ii)
Value of Non
(iii)
Value of fodder
(iv)
Value of Eco-tourism
(v)
Value of
bio-prospecting
(vi)
Value of Ecological
services of forest
(vii)
Value of Flagship
Species
(viii)
Carbon Sequestration
Value
11. The value of the first six goods / services
has been taken as provided in Annexure – RIII of CEC’s report dated 16.10.2006.
The carbon sequestration value has been assessed on the basis of the state-wise
details of carbon in bio-mass of forest as assessed in the Green Indian States
Trust (GIST) report (refer Table – 8 of the Monograph – I enclosed at
Annexure-RII of the CEC’s report dated 16.10.2006) and taking the monetary
value of CO2 @ US $ 20/tonne, which has been arrived at on the basis of the EUA
future prices (ANNEXURE-RS-IX).
The state-wise details of the carbon sequestration value are enclosed at ANNEXURE-RS-X to this report. The value of the flagship species
in respect of forest area outside the National Park and Wildlife Sanctuary,
done on the basis of the valuation done in the GIST report and by assuming that
30% of the Royal Bengal Tiger, 50% of the Asian Elephant, 10% of the one horned
rhino and 0% of Asian Lion are found outside the National Park / Sanctuary and
that the value of other flagships / charismatic species is at least equal to
those of these four assessed species, is enclosed at ANNEXURE-RS-XI to this report.
12. Accordingly, the average Net Present
Value per ha. of forest in
|
Sl. No. |
Particulars |
Value (Rs. / ha.) |
|
1. |
Value of timber and
fuel wood |
1,52,830 |
|
2. |
Value of NTFPS |
7,631 |
|
3. |
Value of fodder |
2,958 |
|
4. |
Value of Eco-tourism |
65,113 |
|
5. |
Value of
bio-prospecting |
25,553 |
|
6. |
Value of Eco-logical
services of forest |
1,44,332 |
|
7. |
Value of flagship
species |
2,58,400 |
|
8. |
Carbon sequestration
value |
1,20,780 |
|
|
Total value of forest |
7,77,597
Say Rs. 8.0 lakh / ha. of forest area in the country |
13. At estimated average NPV value of the country’s forests as Rs. 8.0 lakh per ha., the NPV for forest falling in various eco-value class and density sub-classes has been found to be (rounded to nearest thousand rupees) as under: -
Matrix showing NPV of the different eco-value / canopy density classes at estimated average NPV value of the country’s forest as Rs. 800,000/- per ha.
(in Rs.)
|
Eco-Value class |
Very Dense |
Dense |
|
|
Class I |
10,43,000 |
9,39,000 |
7,30,000 |
|
Class II |
10,43,000 |
9,39,000 |
7,30,000 |
|
Class III |
8,87,000 |
8,03,000 |
6,26,000 |
|
Class IV |
6,26,000 |
5,63,000 |
4,38,000 |
|
Class V |
9,39,000 |
8,45,000 |
6,57,000 |
|
Class VI |
9,91,000 |
8,97,000 |
6,99,000 |
JUSTIFICATION FOR SOCIAL DISCOUNT RATE OF 4% USED FOR
CALCULATING THE NPV
14. This matter was discussed by the CEC with Sh. Partha Sen, Professor, the Delhi School of Economics, Prof. TCA Anant, Member Secretary, Indian Council of Social Science Research, Sh. Pavan Sukhdev, Director, Green Indian States Trust (GIST) and Sh. Pushpam Kumar, Associate Professor, Institute of Economic Growth and Honorary lead author for the GIST. Sh. Pavan Sukhdev and Sh. Pushpam Kumar have justified the 4% social rate of discount used in the GIST report on the principles of inter-generational equity, past trend, rate of inflation and other relevant factors. Prof. Partha Sen was of the view that the social rate discount should ideally be zero so as to give equal weight to the consumption of all generations, including the unborn. For the purpose of present study, he has advocated that the social rate of discount should be taken as 2%. Prof. TCA Anant, giving reference to the “Report on the effect of the climate change and global warming on the world’s economy” compiled by noted economist Sir Nicolas Stern for the Government of United Kingdom wherein a discount rate of 0.1% has been used, opined that the rate of discount should be kept as low as possible and that setting the discount rate at some arbitrary cost of capital linked value would be erroneous. Copies of observation made by them are enclosed at ANNEXURE-RS-XII (COLLY,). From the above, it may be seen that the social discount rate of 4% used in valuation of NPV of the forest used by the GIST and used in this report by the CEC is quite reasonable.
CONSERVATIVE VALUATION OF GOODS AND SERVICES PROVIDED BY
15. As per the GIST, they have been conservative
in estimating forest values in respect of timber, fuel-wood, NTFP, Eco-tourism,
by perception, ecological services etc. The value of timber has been taken on
the basis of the revenue generated by the Forest Department through auctions,
which does not take into consideration the timber given at concessional rate or
given free of cost under the Nistar Rights etc. For the purpose of valuation of
fuel-wood, the value of the fire-wood used collected / pilfered by the local
residents and headlands supplied free of charge has not been considered. The
valuation of non-timber forest products such as bamboo etc. has been estimated
based on the nominal royalty payable to the Forest Department. The
bio-prospecting values are quite conservative as statistics on the exact number
of medicinal plants etc. are not available. The ecological value of forest has
been assessed by using the replacement cost method which is quite conservative.
A note dated
16. The annual value of timber and fuel-wood,
carbon, NTFP, eco-tourism, fodder and watershed services of forest as assessed
by the Kanchan Chopra Committee in respect of the State of Himachal Pradesh and
the comparative figures of the average NPV used in this report using the study
done by the GIST are given below: -
|
|
Timber
& fuel-wood |
Carbon
sequestration |
NTFP |
Eco-tourism
|
Ecological
Services (watershed services) |
Total
|
|
As assessed by Kanchan Chopra Committee (weighted average
for Himachal Pradesh) |
2311/- |
13384/- |
2796/- |
5414/- |
23387/- |
47292/- |
|
As assessed in this report (using GIST study) |
6113/- |
4831/- |
305/- |
2605/- |
5773/- |
19627/- |
CONCLUSIONS AND RECOMMENDATIONS
17. In the present report, by using the forest
cover of
18. In the absence of the availability of
location specific values of goods and services provided by the forest with
different species composition and density, altitude, management practice, soil
type and depth, slope, aspect, productivity, dependence of local population
etc., the CEC is of the view that the above methodology is reasonably reliable
and presently the best available option. It is also not time consuming and
subjective. It may be seen that the basic principles suggested by the Kanchan
Chopra Committee have also been broadly used by the CEC for assessing the NPV.
19. It is understood that in an ongoing project,
the FSI is carrying out state-level mapping of the Forest Types. The above
exercise is expected to be completed within the next 12-18 months. Thereafter,
the MoEF through the FSI, may consider carrying out district-wise mapping of Forest
Types and its further classification into type / sub-type on the basis of
species composition and density, climate, altitude, soil type etc. Once the
above exercise, which may take about another three years, is completed in each
district for various sub-type of forest, the NPV may be assessed after
quantifying the value of goods and services provided by each sub-type of
forest. Till then, the NPV may continue to be charged corresponding to the
eco-value class / sub-class in which the forest land is located. The value of
the NPV may be revised periodically, say every five years, on the basis of
forest cover assessment done by the FSI and the change in the wholesale price
index.
20. The FSI may prepare and supply adequate
number of district-wise maps showing very dense forest, dense forest, open
forest and scrub land falling in different Forest Types to the respective
States / UT's Forest Departments and the regional offices of the MoEF. The FSI
may also procure adequate number of GPS equipments for supply to them. It is estimated that an amount of about Rs.
1.0 crore will be required by the FSI for the purchase of high quality
plotters, colour xerox machines, GPS equipments, consumables, payment of honorarium,
outsourcing of staff etc. This amount may be made available to the FSI by the
Ad-hoc CAMPA out of the interest received by the latter. It is expected that the entire exercise will
be completed within a period of three to five months.
21. Based on the co-ordinates of the
forest area to be used for non-forest purposes / diverted and the ground truth
verification, the corresponding eco-value class / sub-class can easily be
ascertained by the State Forest Department for the purpose of determining the
NPV payable. In respect of the projects involving use of forest land above 100
ha., the verification may be done at the time of the site inspection by the
regional office of the MoEF. The technical assistance wherever required, may be
provided by the FSI.
22. In respect of forest area diverted for
renewal of mining leases or where trees have already been felled, the NPV may
be assessed on the basis of the forest density of the adjoining forest area. In
respect of the scrub land, the NPV
corresponding to the “open forest” may be charged. As recommended in the
earlier report dated 16.10.2006, the use of land falling in National Parks and
Wildlife Sanctuaries may continue to be permitted only in exceptional and
totally unavoidable cases with the permission of this
23. In the above background, it is recommended
that: -
(i)
for non-forestry use /
diversion of forest land, the NPV may be directed to be deposited in the
Compensatory Afforestation Fund as per the rates given below:-
(in Rs.)
|
Eco-Value
class |
Very
Dense |
Dense |
|
|
Class I |
10,43,000 |
9,39,000 |
7,30,000 |
|
Class II |
10,43,000 |
9,39,000 |
7,30,000 |
|
Class III |
8,87,000 |
8,03,000 |
6,26,000 |
|
Class IV |
6,26,000 |
5,63,000 |
4,38,000 |
|
Class V |
9,39,000 |
8,45,000 |
6,57,000 |
|
Class VI |
9,91,000 |
8,97,000 |
6,99,000 |
(ii)
the use of forest land
falling in National Parks / Wildlife Sanctuaries will be permissible only in
totally unavoidable circumstances for public interest projects and after
obtaining permission from the
(iii)
these NPV rates may be
made applicable with prospective effect except in specific cases such as Lower
Subhanshri Project, mining leases of SECL, Field Firing Ranges, wherein pursuant
to the orders passed by this Hon’ble Court, the approvals have been accorded on
lump-sum payment / no payment towards the NPV; and
(iv)
for preparation and
supply of district level maps and GPS equipments to the concerned State / UT
Forest Departments and the regional offices of the MoEF, the Ad-hoc CAMPA may
be asked to provide an amount of Rs. 1.0 crore to the Forest Survey of India
out of the interest received by it.
24. The CEC in its earlier report dated
16.10.2006 has already given its observation / recommendation regarding
projects for which full / part exemption from the payment of the NPV is
justified.
The
(M.K. Jiwrajka)
Member Secretary
Dated:
Any
additional information, if required may kindly be collected from Mr. Haris
Beeran, Advocate of the Ministry of Environment & Forests. The contact
number of Mr. Haris Beeran is +919810010789