SYLLABUS

GS-3: Conservation, environmental pollution and degradation, environmental impact assessment.

Context: Recently, the Ministry of Environment, Forest and Climate Change (MoEF&CC) has notified new rules under the Environment Protection Act, 1986, detailing procedures for the utilisation of the Environmental (Protection) Fund. 

Environmental (Protection) Fund Rules, 2026

• The Rules allow the Environmental (Protection) Fund to be used for 11 specified activities, including installation, operation, and maintenance of environmental monitoring equipment, etc. 

• Prevention, Control, and Mitigation: Activities aimed at the prevention, control, and mitigation of air, water, and soil pollution.
• Remediation and Restoration: Remediation of contaminated sites and restoration of degraded environmental ecosystems.
• Monitoring Equipment: Installation, operation, and maintenance of environmental monitoring equipment, such as networks for ambient air, water quality, and noise.
• Laboratory Infrastructure: Development, modernisation, and upgrading of environmental laboratories for testing and compliance.
• Capacity Building: Strengthening the institutional and technical capacity of regulatory bodies, including CPCB, SPCBs, and Urban Local Bodies.
• Research and Innovation: Sponsoring research and development on clean technologies, sustainable practices, and scientific assessments.
• IT Systems: Creation of Information Technology (IT)-enabled systems and related equipment for environmental monitoring and compliance.
• Legal Mandates: Execution of environmental studies or directions specifically ordered by Courts or Tribunals.
• Awareness Programs: Financing environmental awareness generation programs, including those conducted through eco-clubs.
• Demonstration Projects: Supporting demonstration projects that deploy and test innovative clean environmental technologies.
• Administrative Expenses: Funding for administrative costs related to managing the fund, such as project management unit (PMU) salaries, strictly capped at 5% of the fund's closing balance.

• The Rules designate the Union Environment Minister as the “competent authority” empowered to approve use of the Fund, including for any additional purposes deemed necessary for environmental protection and improvement.

• The Central Pollution Control Board (‘CPCB’) will develop and maintain a dedicated online portal that will serve as the exclusive interface for all authorities and stakeholders involved in implementing these Rules once it becomes operational.

• All payments will be submitted, and States/UTs will be required to annually report total funds received, utilised, and remaining balances.

About Environmental Protection Fund

• The Environmental Protection Fund, created under the Jan Vishwas Act, 2023, collects penalties (₹10,000 to ₹15 lakh) for violations under the Air Act, 1981, Water Act, 1974, and Environment (Protection) Act, 1986.

• Environment (Protection) Act, 1986 is an umbrella act and provides for the protection and improvement of the environment and prevention of hazards to human beings, other living creatures, plants, and property.
• As per this Act, the Central Government has the authority to prescribe environmental protection standards that are statutory and applicable throughout the country.

• Expenditure of Fund

• The notification not only establishes the fund but also clearly specifies the permissible uses of the money.
• The permitted expenditures cover a wide range of activities, most of which relate to monitoring, research, capacity building and administration. 

• The recent notification states that 75% of penalties in the Environmental Fund will go to the State’s Consolidated Fund, while 25% will be retained by the Centre for green initiatives.

• The fund’s accounts will be audited by the Comptroller and Auditor General of India, and the audit reports will be tabled in Parliament and state legislatures.

Significance of the Rules

• Statutory Consolidation of Penalties: The rules legally centralise all environmental penalties into a single Environmental Protection Fund.
• Pollution as a Revenue Source: The Fund’s dependence on penalties ties regulatory financing to continued environmental violations.
• Administrative over Ecological Focus: Fund utilisation prioritises regulatory systems rather than assured environmental restoration.
• Weakened Polluter Pays Principle: Pooled penalties dilute the direct link between environmental damage and remediation.

Source:
Indian Express
Times of India
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