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ARTICLE · 22 JANUARY 2026

Environmental (Protection) Fund Rules, 2026: Converting Penalties Into Green Investments

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On 15 January 2026 the Ministry of Environment, Forest and Climate Change (MoEFCC), exercising the rule-making power conferred by sections 6 and 25 of the Environment (Protection)...

IndiaEnvironment
Rahul Sundaram
Rahul Sundaram

On 15 January 2026 the Ministry of Environment, Forest and Climate Change (MoEFCC), exercising the rule-making power conferred by sections 6 and 25 of the Environment (Protection) Act, 1986 and after due consultation with the Comptroller and Auditor-General of India, notified the Environmental (Protection) Fund Rules, 2026. Heralded as the first comprehensive fiscal instrument dedicated exclusively to environmental protection, the Rules create a non-lapsable fund in the Public Account of India, prescribe an immutable 75:25 Centre-State sharing formula, and impose an activity-positive as well as an item-negative list that together re-calibrate the entire life-cycle of an environmental penalty from imposition, through collection, to transparent, audit-proof deployment.

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