In order to check rapid deforestation due to forestlands being released by state governments for agriculture, industry and other development projects (allowed under the Indian Forest Act) the federal government enacted the Forest Conservation Act in 1980 with an amendment in 1988. The Act made the prior approval of the federal government necessary for de-reservation of reserved 
forests, logging and for use of forestland for non- forest purposes.
The Forest Conservation Act 1980 was enacted to help conserve the country’s forests. It strictly restricts and regulates the de-reservation of forests or use of forest land for non-forest purposes without the prior approval of Central Government. To this end the Act lays down the pre-requisites for the diversion of forest land for non-forest purposes.
This powerful legislation has, to a large extent, curtailed the indiscriminate logging and release of forestland for non-forestry purposes by state governments. While the federal government imposed such strict restrictions, it did not simultaneously evolve a mechanism to compensate state governments for loss of timber logging revenues. This anomaly coupled with increasing pressure for land due to a burgeoning population has generated considerable resentment within state governments resulting in growing pressure to dilute the restrictive provisions of the Act. The Supreme Court of India has currently imposed a complete ban on the release of forestland for non-forestry activities without the prior approval of the federal government.
It states that no project should be undertaken in the vicinity of :-
- Natonal Parks,Wildlife Sanctuaries and Core areas of the Biosphere Reserves.
- Scenic landscapes,areas of geomorphological significance,unique and represantative biomes and eco-systems,heritage sites/structures and areas of cultural heritage and importance.
- Fragile eco-systems such as mountains,areas rich in coral formations as well as marine,coastal,desert,wetland,riverine and island eco-systems.
- Areas rich in biological diversity,genepool and other natural resources.