What’s Ailing India’s Green Credit Programme?

First, in 2004 when the Brahmaputra river breached its banks and swallowed whole his home and farmland in Assam’s Goalpara district. Overnight, he was rendered homeless. With few options left, he and others from the inundated village pitched makeshift houses in a government land close to his village. Brick by brick, a settlement grew: homes, farms, a mosque, even an anganwadi. The Mondals rebuilt their life on a one-acre land.

Then, just as suddenly as the floods did, the forest department arrived with bulldozers in early 2025. Overnight, 1,040 people were evicted and displaced. “First they buried our paddy fields under soil. Then they planted bamboo," said Mondal. “Now the land is fenced off, and we are no longer allowed near our own land,” he added.

A few days later on March 24, 2025, the district forest department posted on social media: “GCP [Green Credit Program] monitoring team visits evicted site in Lakhipur, Goalpara! New beginnings: Plantation drive to revive elephant habitat to commence soon!”

The GCP programme was started in October 2023 by the Ministry of Environment, Forests and Climate Change (MoEF&CC) to “encourage voluntary plantations” among corporations and industries. State forest departments provide a list of “degraded lands” which are then afforested using “green credits” bought by companies.

Internal documents accessed through the Right to Information Act show that in numerous “restoration” sites, locals—like the Mondals—have been evicted in the name of ecological restoration.

Furthermore, in some sites, lands claimed by forest-dwelling communities under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act or Forest Rights Act have been fenced off and listed for afforestation.

The documents also show the rocky path to the implementation of the afforestation programme. Environment officials and funding companies have raised concerns of financial irregularities, of local authorities deviating from approved eco-restoration plans by raising monoculture plantations or planting lower densities of trees, or choosing sites where plantations would be difficult to sustain.

For experts and policy analysts, these instances have added to the skepticism of the programme which they say would violate international norms, particularly on mandates of social justice and involvement of local communities, for market-linked environmental action.

IndiaSpend has written to MoEFCC for comment on safeguards to assess eligible land, steps taken to address irregularities, and concerns around dilution of intent of compensatory afforestation. We will update this story when we receive a response.

Expanding the scope of Green Credits

The Green Credit Programme (GCP) came into effect with the notification of the Green Credit Rules on October 12, 2023 under the Environment Protection Act, 1986.

The rules created a record of degraded land that can be used to promote voluntary plantation activities and eco-restoration projects across the country by awarding “green credits”. One Green Credit is equivalent to one tree planted. These credits, to be bought by individuals, communities and private companies, can be traded domestically.

While the scheme hoped to enrol individuals and private sector industries, until now, it has attracted investments from only state-run oil, coal and power companies. Seventeen public sector units—including, Indian Oil Corporation and other petrochemical corporations, Coal India Limited and its subsidiaries, National Thermal Power Plant Corporation—have bought green credits.

Since its launch, eco-restoration has begun in 225 sites across 12 states covering 48.53 sq.km. of “degraded land”, show data from the MoEF&CC.

Plantations after evictions and displacements

Internal documents accessed from the Indian Council of Forestry Research and Education (ICFRE), a government body supervising the programme, through the RTI Act, show that GCP is being carried out in multiple sites where local communities have been evicted.

The documents include inspection reports conducted by ICFRE and PSU representatives in 169 GCP sites across 10 states. These sites are spread over 3,530 hectares (35.30 sq.km.) of forest involving Rs 117 crore worth of green credits.

In Bihar, during March 2025, an ICFRE inspection team found mud huts and “agricultural activities” in 50 hectares and 55 hectares of degraded forest in Rohatas and Nawada districts, respectively. “Necessary action must be taken to remove the encroachments,” stated a letter dated April 29, 2025 to the Forest department, adding that protection against grazing should be in place.

In Assam, five sites spanning 214 hectares were cleared of homes, farmlands, tea plantations and even two schools. One of them “will be used as a camp hut for plantation and one forest battalion will be placed there to stop any further encroachment,” said the ICFRE inspection report from March 2025.

Assam has seen an uptick in anti-encroachment drives in recent years, particularly in forest land. Land Conflict Watch, an organisation that documents ongoing land and resource conflicts in India, estimates that 15,684 people were affected by evictions in forest lands in Assam.

In another 84-hectare site, the ICFRE team—which included officials from Coal India Limited which is funding the eco-restoration—observed that while major portions of encroachments were cleared the previous year, “a significant portion” remained which “must be cleared before the commencement of ecorestoration activities”.

“While large-scale eviction drives were successfully carried out at several sites, one location continues to face issues of residual encroachment. These must be fully cleared before plantation activities can begin to ensure sustainability and avoid future land conflicts,” said a letter dated April 15, 2025.

However, Ajay Kumar from Green Credit Cell, ICFRE, told IndiaSpend that eviction drives were not linked to the programme. “We have given no such direction. This is the state's law and order problem. We try to refrain from taking such lands. All states have to give undertaking that people were not displaced from the land for plantations,” he said.

He said the Green Credit Cell verifies the status of the land through satellite imagery to ensure that it did not have local communities. In Assam’s case, the sites were chosen after clarifications and assurances from the state Forest department, he said.

When contacted, Tejas Maraswamy, Divisional Forest Officer (DFO), Goalpara district, said the evictions were done only after a survey revealed that the residents were not eligible for claims under the Forest Rights Act.

“The evictions were conducted because the area is a reserve forest and a protected area. It was not done for the purpose of plantations,” he said, and added: “It was good we got the opportunity later for plantation and the revival of habitat through the (GCP) programme. We had to prevent encroachment because it degrades the land.”

A grey zone with few safeguards

The Green Credit Programme currently lacks explicit safeguards for indigenous and local communities. In contrast, internationally traded carbon credit programmes are increasingly attempting to incorporate ethical standards and safeguards to prevent human rights violations.

In a bid to attract private investment, the Union government, in August 2025, expanded the scope of the GCP to allow the credits to be utilised for compensatory afforestation. Prior to this, if a company wanted to acquire forest lands to set up an industry, they would have to “compensate” for the forest loss by paying for afforestation primarily in alternative non-forest land. But, now, companies could just buy green credits which will pay for afforestation in existing forest lands.

“These degraded forest lands could have anyway been regenerated using existing public funds,” said Prakriti Shrivastava, a former Indian Forest Service (IFS) officer. “Instead, companies have been allowed an easy route out through these credits,” she said.

In March 2025, Shrivastava and other members of environmental groups, People for Aravalli and Rainbow Warriors, filed a writ petition in the Supreme Court questioning the criteria for determining credits or “degraded” lands. The PIL is yet to be heard.

The August notification also dilutes the stated intention of the Green Credit mechanism. “I have not been too comfortable with the Carbon Credit System since it reflects “wrong doer’s penance” in monetary terms. There is a need to develop a more positive approach,” said Prime Minister Narendra Modi about GCP’s objectives, quoted prominently on the website.

"There is a significant shift in logic from restitution of forest harm to market-mediated compliance. This fundamentally weakens the legal safeguards of the Compensatory Afforestation regime and normalises forest loss through market instruments," said Meenal Tatpati, independent lawyer and researcher, who has closely studied the green credit mechanism.

The programme also escapes scrutiny of international guidelines.

The United Nations Framework Convention on Climate Change (UNFCCC), which is the primary international treaty for coordinating the global response to climate change, had placed “mandatory environmental and human rights” safeguards while introducing the concept of carbon credits.

Policy observers point to the preamble to the 2015 Paris Agreement where 194 countries (and the European Union) agreed to recognise that climate action must be grounded in justice, human rights, including the “the rights of indigenous peoples (and) local communities”.

The UN body responsible for establishing the carbon market has finalised a grievance and appeals procedure for anyone affected by the carbon credit market. More safeguards are expected to be put in place to empower vulnerable communities and individuals.

“However, GCP does not need to adhere to these standards because it is not traded internationally under the Paris Agreement,” said Trishant Dev, deputy programme manager specialising in climate, trade and green industrial policy at the Centre for Science and Environment (CSE). “If India were to make these credits tradable internationally under the agreement, they may fall short of the standards laid down in the agreement,” he said.

When GCP runs contradictory to Forest Rights Act

The accessed internal documents show possible violations of the country’s forest legislations aimed to protect indigenous communities. At Nana Baval village in Sabarkanta district of Gujarat, the site has been fenced off, while borewells and earthen check dams were being built, photographs dated March 26, 2025 from the inspection report show. Actual tree plantation had not started, residents say, but official reports show activities such as laying “thorny bushes”, creation of concrete walls, and appointment of watchmen is under way.

During the fencing of the land, villagers had been told vaguely that the land was being protected for “development activity” that will benefit the village.

“We have been cultivating this land for nearly 45 years. We earn around Rs 70,000-80,000 annually from it. Even now, we don’t know what will happen to our crop,” said Laxman Bumbadiya (35), a farmer from the Dungri Bhil community, a Scheduled Tribe community indigenous to the Aravali landscape.

Villagers have filed applications over this land under the Forest Rights Act, which identifies historical rights over forest lands for tribal communities. “We’ve lost track of the number of times we’ve gone to the Collector’s office to check on the status of FRA claims,” he said.

Their applications have remained pending, they said. Across India, there are nearly 750,000 claims pending under the FRA. Under the Act, claimants cannot be evicted or displaced until the process of verification is complete.

“Nearly all GCP sites are on potential Community Forest Rights lands. The risk of communities losing their right over forests increases under GCP,” said Gautam Aredath, a policy analyst at Ashoka Trust for Research in Ecology and the Environment (ATREE)’s CFR Central India Initiative, which promotes decentralised and democratic forest governance for conservation and livelihoods.

ICFRE’s inspection reports show that in one site spanning 16 hectare in Kamrup West district of Assam, which was planned to be restored through credits bought by Oil India Limited for Rs 1 crore, the local community had already obtained rights under the Forest Rights Act. The sites were chosen in June 2024, and the funding companies were informed of the Forest Rights applications only in March 2025 during their inspection.

Aredath believed that GCP’s “top-down” approach to restoration can be exclusionary. “Restoration must deliver both local livelihood and wider environmental benefits. This will be best achieved by using the funds through GCP to allow local communities to lead restoration,” he said.

Pia Sethi, senior fellow at the Centre for Ecology Development and Research, said these plantations should account for local incomes, aspirations and dependence on the land. “Ideally, these projects should work closely with pastoralist communities in the restoration of ecosystems and protection of their ancestral grazing grounds, because they have historically been given short shrift,” she added.

Implementation on rocky ground

Two years into the scheme, inspection reports and letters of correspondence between ICFRE and forest departments have listed non-compliance, irregularities and procedural lapses in choosing of lands and in means of restorations.

For instance, in five sites in Assam’s Goalpara district, officials from ICFRE as well as the companies funding the green credits found that the forest department had deviated from plans by cutting costs. The original approved plan was for an Assisted Regeneration plantation with 2,500 saplings per hectare. Local forest officials however planted bamboo at 625 saplings per hectare.

“...such changes are not permissible…,” said ICFRE in a letter to the Principal Chief Conservator of Forest, Assam. “This raises serious concerns regarding financial integrity and compliance with GCP guidelines.”

In Chhattisgarh, the monitoring team observed a “mismatch” between species listed in cost estimates and those being raised in nurseries. In Uttar Pradesh, officials found that plantation was being done in areas adjacent to the chosen site.

In at least eight sites, officials found the chosen site unsuitable for eco-restoration. In Keonjhar in Odisha, for instance, officials found that the site had a “dense canopy” of trees already. In Telangana, the site was an existing mature eucalyptus plantation. In several sites across states, the site selected was too rocky to plant trees.

GCP promises its investors that the forest department will finish the plantations within two years. But, internal reports show persistent issues of delays and slow progress. Just 28% of the pledged funds had been used, with ICFRE noting bureaucratic delays in disbursing funds from nodal offices in state forest departments to local forest authorities.

When asked about these irregularities and concerns, Ajay Kumar from the Green Credit Cell at ICFRE, said: “We are monitoring the situation regularly and addressing if there are any issues. It’s our responsibility to ensure there are no financial irregularities and the scheme is successfully implemented.”

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