Sources said the Union Cabinet, chaired by Prime Minister Narendra Modi, decided to withdraw the Indian Forest Act (Amendment Bill), 2012 following the recommendations of the high-level government panel headed by former cabinet secretary T S R Subramanian.
They said the bill may be brought to Parliament after incorporating relevant suggestions made by the panel.
The panel, after reviewing the existing green laws, had submitted its report to Environment Minister Prakash Javadekar last month.
Amendments to the 1927 legislation was moved by Jairam Ramesh during his tenure as Environment Minister in the UPA government. It was scruitinised by the standing committee after being presented in Parliament in March 2012.