The Government of India’s Green Credit Rules, 2023, established the Green Credit Programme (GCP) as a market-based mechanism to incentivise “environmentally-positive actions”. Under the law, green credits can be generated from a range of activities such as tree plantation, water conservation, sustainable agriculture and more, and traded on a domestic platform to meet legal obligations or encourage voluntary action.

The political pitch went further. At its launch during COP28 in Dubai, Prime Minister Narendra Modi presented the GCP as more than a market: a moral initiative to “add positive points to the Earth’s health card”, he claimed, breaking from the commercialised philosophy of carbon credits.

Both claims — market and moral — falter under scrutiny. Two years on, only the tree plantation component has moved forward. A draft framework for water conservation remains stalled, and other activities lie dormant. Even for plantations, the legal framework has undergone multiple revisions, and has narrowed in both scope and ambition. What began as a broad-based methodology, envisaging a variety of actors and multiple land tenures, has been pared back.

In its latest iteration, credits are generated solely from plantations on land controlled by forest departments. These credits are explicitly non-tradable, and their primary, if not, only viable, use is as offsets for statutory compensatory afforestation requirements. In effect, growing trees in one place permits cutting down forests in another.

To be clear, the initial methodology for plantations was not without concerns. Its tree-centric focus overlooked other ecosystems, while questions of forest rights and equity were sidelined. But rather than iterative improvement, what we have seen are abrupt manoeuvres, some reportedly bypassing routine bureaucratic procedures (and public consultation, as usual, being a mere tick in the box).

Little now remains of the moral rhetoric, and nothing resembling a market exists. To make sense of this diminishing arc, I adapt the three anchors of the Prime Minister’s address at COP28: prakriti (nature), sanskriti (culture), and vikriti (distortion). A better appreciation of these lenses, I suggest, can guide meaningful reforms to the GCP. I support my arguments with an analysis of geo-spatial data pertaining to the 896 land parcels, covering 22,727 hectares (ha), that are enrolled on its official portal (as on September 29, 2025).

Prakriti: what the land is, and how the state sees it

India’s environmental governance suffers from what has been called Biome Awareness Disparity (BAD). In administrative reflex, the “environment” is often collapsed into “forest,” and “restoration” reduced to an obsession for planting trees, even where they do not naturally belong. Just planting trees without paying attention to local ecological conditions is a recipe for failure, a pattern amply evidenced across the country.

This is especially true about India’s open natural ecosystems (ONEs), where climatic and soil conditions limit tree growth. In these water-limited landscapes, tree plantations face inherent ecological constraints, and importing water to sustain them creates hidden trade-offs. Yet ONEs, frequently dismissed as “wastelands” in official parlance, are routinely targeted for afforestation under the mistaken belief that they are degraded forests in need of repair. Tellingly, the Prime Minister himself singled out “wastelands” as a priority area for intervention when launching the GCP.

The pioneering ONE map by Madhusdan and Vanak (2023), which spatially identifies the likelihood of landscapes being ONEs, allows us to scrutinise this policy lens. Unsurprisingly, data from the GCP portal shows that 480 parcels (13,240 ha) overlap with areas likely to be ONEs, including 365 parcels (10,154 ha) in areas of high likelihood. In effect, more than half of the “forest land” earmarked for the GCP overlaps with ONEs, raising strong concerns about the ecological underpinnings and viability of the programme. To stress this point, 64 of these plantation sites fall in districts where groundwater stress has already been categorised as “critical” or “over-exploited”.

The Ministry of Environment, Forest and Climate Change (MoEFCC) has sporadically acknowledged this issue in office memoranda that mention growing shrubs and grasses, soil and moisture conservation and removal of invasive species as possible restoration activities. Yet the law still ties green credits only to tree growth, skewing incentives away from holistic and contextual ecosystem restoration.

This approach is counterproductive. Even as policy doubles down on afforestation, reinforced by international climate commitments, the scientific community has mounted a strong case (e.g., here) for recognising ONEs not as forest “blanks,” but as distinct, dynamic and multifunctional ecosystems. They support specialised biodiversity, water-efficient carbon sequestration, and India’s large pastoralist system.

India’s prakriti has always been plural. In its cultural imagination, Lord Ayyappa ventured into the rainforests for tiger’s milk, while Lord Krishna herded cattle in open grasslands. Governance should be alive to this ecological diversity, and the GCP’s goalpost must move from planting trees to restoring landscapes.

Sanskriti: nurturing a culture of care

India’s remaining strongholds of forest cover closely overlapping with regions of Adivasi presence is a testament to their environmental knowledge and sustainable living. Both globally, and in India through the Forest Rights Act (FRA), it is firmly recognised that effective conservation depends on the active stewardship of indigenous and local communities.

The Green Credit Programme diverges sharply from this reality. By treating forest land as the sole domain of forest departments, the programme positions them as the “seller” of green credits to financially capable investors, shutting out local communities from participation and benefits. This is not merely a design flaw, it is a legal violation. The FRA vests various forest rights in the forest-dwellers, most notably the community forest resource (CFR) rights that recognise the authority of gram sabhas to protect and manage their customary forests. The MoEFCC estimates that more than half of India’s recorded forest land comes under CFRs. Under the Forest Rights Rules, the government has a positive obligation to officially record these rights, and then, it is obvious that restoration activities on such lands need the gram sabha’s buy-in and involvement. Yet, the GCP does not even ask whether the lands being enrolled belong to gram sabhas.

Lele, Khare and Mokashi (2020) have mapped CFR potential across five central Indian states, providing a lower-bound estimate of eligible villages and forest lands. Overlaying this with the GCP data — 553 parcels (14,289 ha) are in these five states — shows that 483 parcels (13,559 ha) are in CFR potential areas: a striking overlap of more than 90%. Around 64% of this land — 9,170 ha in 392 parcels — fall fully or partly inside village boundaries. By failing to account for community tenures, the GCP undermines statutory rights of forest-dwellers.

But legality aside, restoration of forests is unlikely without local participation. As per the GCP’s latest methodology, green credits will be awarded for each new tree aged more than five years if the land parcel attains 40% canopy density. After this, the implementing entity exits and maintenance shifts to the forest department. This is too short a time frame, and canopy density alone is an inadequate metric to judge a restoration activity as completed or successful. Even forest-based carbon credit schemes typically require “permanence”, ensuring that benefits are maintained for decades, through long-term contracts or credit buffers. The GCP, by contrast, is a one-off transaction, shifting long-term risk away from the investor.

Centring gram sabhas in restoration, with the authority to determine how restoration is done and what species are planted to enhance livelihood benefits, is key to long-term success. Many CFR-titled gram sabhas are already seeking funds to rejuvenate their forests. But the Ministry of Tribal Affairs’ recent steps that enable such funding conspicuously lacks convergence with forest departments’ budgets. Redesigning the GCP to recognise CFR rights is not only a legal imperative but also a practical opportunity to create a win-win.

Vikriti: what it claims, and what it is

A final issue that looms large is the very purpose of the GCP. Despite lofty claims of promoting “environmentally-positive actions,” “sustainable lifestyles,” and a “mass movement for the environment,” the GCP and MoEFCC’s recent guidelines show that its primary function is to service compensatory afforestation in lieu of diverting forest land. Applicants for forest diversion have long viewed the requirement to find land for compensatory afforestation as a bottleneck. The GCP eases this hurdle by monetising the obligation, but in doing so, it contravenes Supreme Court orders that, although premised on a reductive understanding of the environment, still mandate compensatory land for diversion.

While the government will likely be called upon to defend this change legally, it must at the very least impose strict ratio limits on how much compensatory afforestation can be met through green credits. Compensatory afforestation is not a positive action, not even net-zero, because plantations are a poor substitute for the natural forests lost elsewhere. More importantly, the government should channel a larger share of funding towards genuine environmental action, designed and implemented by local communities for their local contexts.

Whether the programme becomes a mirror of the distortions in India’s environmental governance or evolves into a credible tool hinges on a few things: does it actually improve ecosystems, promote equity, strengthen land-based livelihoods, and adopt a long-term vision for the environment? On all these counts, the GCP has a long way to go.

Read more: Green credit rules tweaked to favour canopy cover, remove trade provision 

The author is a policy analyst at ATREE’s Centre for Policy Design associated with the CFR Central India Initiative. Email: gautam.aredath@atree.org.

Banner image: Tree plantation by farmers in Nagpur, Maharashtra. Image by EqualStock IN via Pexels (CCo).

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