KATHMANDU, June 24: The government had established the Forest Development Fund in 2078 BS with the objective of fire control, forest development, conservation and promotion. The fund, established under the Department of Forests and Soil Conservation (DoFSC), has accumulated Rs 234.22 million to date, but this amount has remained unused for six years.
Deputy Director General Dhananjay Lamichhane of the DoFSC confirmed that the fund’s money has not been used and remains idle. “We have drafted procedures for utilizing the fund, and the accumulated amount will be used as soon as the draft is approved,” Lamichhane said. He added that approval from the Ministry of Finance will be sought once the procedures are finalized.
Unutilized one billion rupees stuck in Forest Development Fund
According to Section 45 of the Forest Development Fund and Forest Act, 2076 BS, revenues from allowing forest land to be used for other purposes must be deposited into this fund. A department official said that the deposited money has been in the DoFSC’s escrow account at the Office of the Controller of Accounts since 10 March 2022, pending operation.
The law stipulates that forest area users must compensate by providing land in place of the forest area; if unable, monetary compensation must be paid into the fund. Similarly, for every tree cut in forest areas, users must plant ten saplings; failure to do so requires compensation, which also goes into the fund. Revenues from carbon trading are likewise mandated to be deposited.
The law also requires institutions involved in infrastructure development to restore destroyed forest areas; all such funds should go into the Forest Development Fund. However, the Auditor General’s 62nd annual report noted a lack of funds collection and monitoring by implementing agencies.
As per Section 45 of the Forest Act, revenue from allocating forest areas for other purposes must be used for conservation, promotion, and development. Under the 2079 Forest Regulations, the Minister of Forests chairs the fund committee, with the DoFSC’s Director General as the member-secretary. The fund needs a committee with 13 members. So far, only one meeting has been held.
Rule 4 of the Regulations states that authorized users must deposit five years’ worth of tree planting and protection expenses into the fund. Rule 95 allows users to apply for land substitution if compensation land cannot be provided as per previous laws.
The Auditor General recommended that the government act to utilize the fund as per legal provisions.
In FY 2023/24, the DoFSC granted forest use rights to 628 entities, including 34 user groups, with expected deposits of Rs 145.36 million from infrastructure projects like the Kathmandu–Terai highway, Madan Bhandari Highway, Khambagade–PaluTe–Bidyapur road upgrades, and a 50-bed modern infectious disease hospital in Lumbini Province. The Auditor General noted that this amount has not yet been deposited and recommended that the DoFSC recover it.
