Financing of wasteland afforestation in India

Abstract

India has vast tracts of wastelands, which have been lying barren for ages. Most such lands are physically suitable for growing trees and thus could be put to socially productive uses. However, although usually economically viable, afforestation requires massive initial investment, generally beyond the means of the landowners. Also, government budgetary allocations do not cover current needs. In this situation, institutional credit is required. The National Bank for Agriculture and Rural Development (NABARD) of India has recognized this need and has devised a number of different schemes to provide refinance facilities to individuals and organisations. Although the number of forestry schemes refinanced by NABARD has increased rapidly in the past, they currently constitute only about 1% of the total number of loans sanctioned, and only about 2% of NABARD's cumulative loan disbursement to date. In fact, since 1992, the share of afforestation schemes has declined. A number of factors have been identified as major constraints, including time‐consuming and complicated procedures for accessing land; restrictions on harvesting and selling trees; delays in sanctioning and disbursement of bank credit; non‐remunerative prices for tree products; and flawed public policies and programmes. This article argues that unless these constraints are overcome, NABARD will not be able to play an effective role in speeding up development programmes in the forestry sector. It further argues that most of the current constraints on institutional credit for wasteland afforestation can be removed or relaxed. Practical strategies are suggested to mobilize more funds and channel more institutional credit for wasteland afforestation in India.

Interaction effects between economic development and forest cover determine deforestation rates

“…However, these programs require a strong presence from the government (Varmola and Carle, 2002) and substantial capital that must be financed either by the government itself, by international donors, or by private corporations. Obviously, low-income governments have little cash to invest in any environmental project (Wilkie et al, 2001;Balooni, 2003), and the costs of afforestation schemes must be balanced against the opportunity costs of putting that limited pool of money into other economic development schemes (Norton-Griffiths and Southey, 1995;Wilkie et al, 2001;Chomitz et al, 2005). Therefore, it is difficult for them to lead a country through a forest transition from their own resources.…”

The evolution of forest restoration in India: The journey from precolonial to India's 75th year of Independence

“…During the postcolonial period, another popular strategy was to increase green cover outside recorded forest areas, in areas formally designated by the colonial government as 'wastelands' (Kaur & Mittal, 2020). Although wasteland was originally a financial rather than an ecological designation (i.e., lands that did not generate revenue, not necessarily lands that were degraded), there were ventures to restore those lands with commercially viable afforestation (Balooni & Singh, 2003). The financing and budgetary constraints crippled the efforts (Balooni, 1999).…”

International overview on waste to biofuel options with a focsu on waste potentials in Germany and funding incentives in the EC

“…Besides degraded and marginal lands, there also exists an amount of abandoned farmland. Converting degraded or marginal lands back to productivity however requires huge investment (Balooni Singh, 2003). The area of degraded lands globally is estimated to be between 500 -3500 mill ha (Hoogwijk, 2004;Bai et al, 2008).…”