Sections 15E to 16B: the Environmental Protection Fund

In one line

The Act acquired a fund in 2024, thirty-eight years after it was passed, and every penalty now goes into it.

In the wording a student can write in an examination: section 15E of the Environment (Protection) Act 1986 provides that where any penalty or additional penalty is imposed under sections 14A, 14B, 15, 15A or 15B the amount shall be credited to the Environmental Protection Fund established under section 16; section 16 empowers the Central Government by notification to establish that Fund, provides for what is credited to it and the three purposes to which it may be applied, requires the Central Government to notify an administrator, and requires it to allocate seventy-five per cent of the amount of the penalties credited to the Fund to the State Governments and Union territory administrations; and sections 16A and 16B provide for the accounts and audit of the Fund and for an annual report.

Why a fund matters

Because a penalty paid into the consolidated fund of India disappears into general revenue and buys nothing environmental. A penalty paid into a dedicated fund can be spent on the problem that produced it.

The design also answers a criticism of the decriminalisation: if the penalty is not punishment and does not compensate anybody, what is it for? The answer given by section 16(3) is that it pays for awareness, education and research, for the purposes of the Air Act and this Act, and for such other purposes as may be prescribed.

Section 16, clause by clause

Sub-section (1). The Central Government may, by notification in the Official Gazette, establish a fund to be known as the Environmental Protection Fund.

Sub-section (2), what is credited. Three sources. The amount of penalty imposed under the Air (Prevention and Control of Pollution) Act 1981 and under this Act. The interest or other income received out of investments made from the Fund. And any other amount from such sources as may be prescribed.

Notice the first: penalties under the Air Act go into the same Fund. The two statutes were decriminalised by the same amending Act and share the machinery.

Sub-section (3), the three purposes. The Fund shall be applied for the promotion of awareness, education and research for the protection of environment; for the expenses for achieving the objects and for the purposes of the Air Act 1981 and of this Act; and for such other purposes as may be prescribed.

Sub-section (4), the administrator. The Central Government shall notify the administrator for the administration of the Fund and other matters connected therewith and incidental thereto in such manner as may be prescribed.

Sub-section (5), the seventy-five per cent. The Central Government shall allocate seventy-five per cent of the amount of penalties to the State Governments or Union territory administrations, which has been credited to the Fund.