Environmental Protection Fund

Source: TOI

Subject: Environment

Context: The Union Government has notified detailed rules for the utilisation and administration of the Environmental (Protection) Fund, operationalising provisions introduced under the Jan Vishwas Act, 2023.

About Environmental Protection Fund:

What it is?

• The Environmental (Protection) Fund is a statutory fund of the Government of India created to utilise penalties imposed for violations of environmental laws for pollution control, environmental restoration, monitoring, research, and capacity building.

Established in:

• Provided for under the Environment (Protection) Act, 1986

• Operationalised through rules notified in January 2026

• Strengthened by the Jan Vishwas Act, 2023, which decriminalised several environmental offences while retaining monetary penalties

Nodal authority:

• Administered by the Ministry of Environment, Forest and Climate Change (MoEFCC) or any body notified by the Central Government

Aim: To ensure that pollution penalties are recycled for environmental protection, remediation, clean technology promotion, and strengthening regulatory institutions.

Key features:

• Source of funds: Penalties under the Air (Prevention and Control of Pollution) Act, 1981, the Environment (Protection) Act, 1986, interest from investments, and other prescribed sources.

• Permitted uses (11 activities): Pollution prevention and mitigation, remediation of contaminated sites, environmental monitoring equipment, clean technology research, IT-enabled systems, laboratory infrastructure, and capacity building of regulatory bodies.

• Revenue sharing: 75% of penalty proceeds transferred to the Consolidated Fund of the State/UT, 25% retained by the Centre.

• Governance mechanism: Creation of dedicated Project Management Units at Central and State levels.

• Oversight & transparency: Comptroller and Auditor General of India (CAG) to audit the Fund Central Pollution Control Board (CPCB) to develop and maintain a centralised online portal for fund implementation

• Comptroller and Auditor General of India (CAG) to audit the Fund

• Central Pollution Control Board (CPCB) to develop and maintain a centralised online portal for fund implementation

Significance:

• Strengthens the “polluter pays principle” by directly linking penalties to environmental remediation.

• Converts decriminalisation into deterrence with accountability, avoiding regulatory dilution.

• Enhances Centre–State cooperation in environmental governance through revenue sharing.