Industry bodies are advocating for greater flexibility in compensatory afforestation requirements, particularly for forest-rich states. According to reports from Business Standard, the Odisha Steel Producers' Association (OSPA) has urged the state government to recommend to the Centre a policy relaxation allowing industrial project proponents in Odisha to undertake compensatory afforestation over degraded forest land measuring twice the area diverted for non-forest purposes, irrespective of ownership. The association has specifically requested the Odisha government to examine the proposal and make a strong recommendation to the Ministry of Environment, Forest and Climate Change (MoEFCC) to permit all industrial project proponents in forest-rich states such as Odisha to undertake CA over double the degraded forest area, provided the state has already achieved the prescribed national forest and tree-cover threshold and more than 33% of its geographical area is recorded as forest.
Under the existing compensatory afforestation framework, CA is generally required to be carried out over equivalent non-forest land that is not under the management and administrative control of the forest department. As reported by Business Standard, the rules provide for the use of degraded forest land in specified circumstances, including certain projects in states where forest area exceeds 33% of the geographical area and suitable non-forest land is unavailable. However, this provision is currently available only to central agencies, central public sector enterprises and captive coal blocks of state public sector enterprises. S K Popli, secretary-general of OSPA, noted that the principal constraint was not merely the requirement to undertake afforestation but the availability of suitable non-forest land for the purpose.
Odisha has achieved the one-third forest and tree-cover benchmark with 37.63% of its geographical area under forest and tree cover. According to the latest Odisha Economic Survey 2025-26, the state's recorded forest area stands at 61,204 sq km, representing 39.31% of its geographical area of 1,55,707 sq km. However, the overall forest-cover figures mask considerable variation in forest density, with around 28,164 sq km of recorded forest area having canopy density of less than 10%, and another 12,496 sq km falling in the 10-40% canopy-density range. The state's net sown area stands at around 36.2% of its geographical area, while land under non-agricultural uses accounts for 8.3%.
The state faces increasing pressure on agricultural land as it seeks to raise cropping intensity from about 165% currently to 220% by 2036 and 250% by 2047 as part of its Viksit Odisha vision. According to Business Standard, Prabodh Mohanty, president of the Utkal Chamber of Commerce and Industry (UCCI), noted that there are thousands of acres of land earmarked as forest land only on paper. He suggested that instead of using additional non-forest land to meet CA requirements, such degraded forest land could be brought under afforestation, assisted natural regeneration and other restoration measures, which would improve the quality of existing forests while freeing non-forest land for competing development requirements.
Odisha has prepared an ambitious plan to raise its steelmaking capacity from around 45 million tonnes a year to 130 million tonnes by 2030, which is expected to increase demand for land. As reported by Business Standard, OSPA observed that the availability and cost of land for large industrial projects can have a direct bearing on project timelines and viability. The association noted that acquiring additional non-forest land for CA could involve separate processes, costs and administrative clearances, adding to the complexity of project implementation. Industry bodies have made it clear that any mechanism should be subject to periodic review based on the India State of Forest Report, which is published every two years, allowing the continuation of any relaxation to be assessed against changes in a state's forest and tree-cover position.
