This study was conducted to examine the extent to which the rural poor living in the forest fringe areas of West Bengal, India were dependent on forest for their subsistence. The study also analysed their participation in forest management and its impact on the environment. Total 300 households in 9 villages in the districts of Bankura and Purulia were surveyed. Both statistical and econometric techniques (Censored Tobit Model) were used to analyse the determinants of collective action in forest management. Logit Regression Method was used to analyse the nexus between active forest management and forest degradation. The results of the study indicated that in those households where the percentage of the agricultural income to the total income is very low, the participation in forest management is very active. The study also revealed that collective action in forest management is positively related to the percentage of common forest resource income to total income of the rural households. The result also confirmed that forest management has a critical role in reducing forest degradation.