The report released by Comptroller and Auditor General of India this month also found that Jammu accounts for 25 per cent of forest land (767 sq km), below prescribed level of 33 per cent as per National Forest Policy.
Moreover, out of the 25 per cent forest land, only 1,063 hectares (one per cent) has been demarcated so far, the report stated.
The records showed that 1883.23 hectares of forest land has been diverted for non-forest purposes between 1991-92 to 2010-11 period in Jammu district, the report for the year ending March 2011 said.
Also, no land has been brought under forest cover in lieu of forestland diverted, the report stated.
As per the State Forest Conservation Act, 1997, twice the area of forest land diverted for non-forest purpose should be afforested, it said.
"Further, possession of the land was transferred to user agencies without clearing the payments from them in contravention of the rules," it said.
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As a result an amount of Rs 56.07 crore was outstanding against various agencies on account of compensation for the periods ranging between 6 to 288 months, it said.
According to rules, the possession of forest land diverted for non-forestry purposes should not be handed over to the user agency till all the payments due are deposited, it said.
Divisional Forest Officer (DFO), state forest department, Jammu, stated in reply to CAG queries that recovery of compensation amounts would be taken up with user-agencies. The DFO, however, said fresh forest areas could not be raised due to non-allotment of funds.
"The reply was not accepted as the department should not have, in violation of rules, handed over the possession till all the payments were deposited by the indenting department," the CAG report said.
CAG indicted the department for dismal performance to reduce degraded area, recovery of compensation and increase of forest cover.