High Conservation Value Forests: An Instrument for Effective Forest Fiscal Federalism in India- Indian Institute of Forest Management, Bhopal (Oct. 2013-Oct. 2014)

Overview

Project Duration – Oct. 2013-Oct. 2014

IORA and IIFM developed a new set of criteria for the 14th Finance Commission to identify High Conservation Value Forests. The study helped develop India’s current tax devolution formula for distributing revenue from central to state governments. The new tax devolution formula balanced the distribution of the sharable central taxes amongst states based on the quality of their forest cover. Making India the first country to undertake Ecological Fiscal Transfer (EFT) based on forest cover, the formula provides 7.5% weightage to forests, amassing sharable central taxes to the tune of ₹ 3.53 Lakh Crores. This amount was disbursed to the states during the XIV Finance Commission’s term.