NHPC's Bid to Mortgage Forest Land for Hydel Project Funding Rejected by Government

Answer: D

Statement 1 is correct. The primary objective of the Forest (Conservation) Act, 1980, is indeed to check the indiscriminate diversion of forest land for non-forest purposes. Statement 2 is correct. The government's rejection of NHPC's bid to mortgage forest land indicates that such an action is interpreted as a 'non-forest purpose' or a change in the legal status of forest land, which necessitates prior approval from the central government under the FCA, 1980. The rejection means this approval was not granted. Statement 3 is correct. As per the Forest (Conservation) Rules and subsequent guidelines, compensatory afforestation is a mandatory condition for any approved diversion of forest land, typically requiring afforestation on an equivalent area of non-forest land or degraded forest land.

Answer: B

Statement 1 is incorrect. While PSUs may receive some budgetary support or equity infusion from the government, they also raise significant capital through internal accruals, market borrowings (bonds, loans), and other financial instruments. They do not *primarily* rely on budgetary support for all capital expenditure. Statement 2 is correct. The news explicitly states that the rejection 'shows the challenges PSUs face in raising capital, especially for large infrastructure projects that often involve environmentally sensitive areas.' Statement 3 is correct. The Forest Rights Act, 2006 (FRA), specifically mandates that the consent of the Gram Sabha is required for the diversion of forest land for non-forest purposes, particularly for projects that require the displacement of forest dwellers or impact their traditional rights. This provision aims to protect the rights of forest-dwelling communities.

Answer: C

Statement A is correct. The Supreme Court's landmark judgment in T.N. Godavarman Thirumulpad vs. Union of India (1996) clarified that the term 'forest' under the FCA, 1980, includes not only statutorily notified forests but also any area recorded as forest in government records, irrespective of ownership, and even areas that meet the dictionary meaning of a forest (Deemed Forests). Statement B is correct. Reserved Forests are the most restricted category, with significant control over activities, whereas Protected Forests allow some rights and activities unless specifically prohibited. Statement C is NOT correct. While the Ministry of Environment, Forest and Climate Change (MoEFCC) is the nodal ministry, the approval process for diversion of forest land involves multiple stages, including recommendations from the State Forest Department, State Advisory Committee, and finally, the Central Government (MoEFCC) after due diligence and often based on the recommendations of the Forest Advisory Committee (FAC). It's not the 'sole authority' in a unilateral sense, as it involves a multi-tiered process and recommendations. Statement D is correct. 'Deemed Forests' are a crucial category identified by the Supreme Court, ensuring protection for ecologically important areas not formally notified as forests.