Forest ecosystem services play a significant role in India’s economic development, and a World Bank study into India’s forest sector has recognised the huge potential to develop markets for forest products and services (World Bank, 2007). Forestry is the second largest land use in India next to agriculture. The recorded forest area of the country is 76.52 million hectares, which is divided into reserved, protected and unclassified forests. The extent of forest cover 1 in the country is 67.71 million ha (20.60 per cent of total geographical area) as per the State of Forest Report-2005 of the Forest Survey of India. In India, about 90 per cent of the forests are under government ownership.
The nation is aiming to achieve 33% of area under forest/tree cover by 2012 in order to fulfill the objectives of the National Forest Policy. In order to achieve this, the national forestry action plan (NFAP) prepared in 1999 envisages an investment of Rs. 6700 crores per year over a period of 20 years. This is five to six times higher than the present total annual budget allocation to the Ministry of Environment and Forests.
