Financing of wasteland afforestation in India

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.     

Tree plantations for restoration of degraded lands and greening of India: a case study of tree growers' cooperatives

India has over 100 m ha (million hectares) of village common lands. De jure, these lands are owned by the state but, de facto, they are used in common by villagers. Most of the village commons are degraded and denuded and are almost nonproductive. Several attempts have been made in the recent past to restore them through planting of trees by governmental and non-governmental organizations. Tree Growers' Co-operative Societies (TGCS), as an organisational innovation of relatively recent origin, have proved to be more cost-effective than other forms of organisations engaged in greening the village commons in India. This paper attempts to assess the financial viability of tree plantations carried out by three selected TGCS and to distil lessons of their experience useful for policy purposes. The study revealed that plantations founded by the sample TGCS were financially viable, and that the plantations had transformed the desolate village commons into 'green wealth'. The authors conclude that the TGCS have a high potential as an instrument for promoting the afforestation of India's degraded village common lands and thereby improving village economy and the quality of the environment.