The Chhattisgarh Legislative Assembly has passed the Chhattisgarh Ease of Doing Business Act, 2026, establishing a comprehensive risk-based business approval framework that promises to cut red tape for over 15 lakh MSMEs operating in the state. The legislation, passed by voice vote on 16 July 2025 in Raipur, introduces automatic approvals, self-certification, and a tiered oversight structure designed to make the state a more attractive investment destination.

What the Act Changes

At its core, the law categorises businesses by risk profile — factoring in size, investment, and the nature of operations. Low-risk enterprises, including MSMEs and startups, will benefit from simplified documentation, self-certification, and deemed approvals, with minimal direct government intervention. High-risk and large industries will continue to face the regulatory oversight that their scale and complexity warrant.

One of the most significant departures from existing practice is the replacement of routine government inspections with self-certification or certification by licensed professionals — engineers and architects among them — for a wide range of low-risk businesses. This shifts compliance responsibility to the enterprise level while reducing the scope for inspector-level discretion, which critics have long identified as a source of delays and informal costs.

Deemed Approvals and Faster Clearances

The Act introduces a strict timeline mechanism: if a government department fails to act on an application within the prescribed period, the approval is deemed granted automatically. This provision directly targets the chronic problem of file-clearance delays that have historically discouraged smaller entrepreneurs from formalising or expanding their operations.

Several permits will also move away from annual renewal cycles to a risk-based compliance framework, reducing recurring administrative burden. Approvals for water connections, firm and society registrations, and building plan sanctions are among the categories slated for fast-tracking under the new rules.

Three-Tier Monitoring Structure

To prevent implementation from stalling — a common fate for business-reform legislation — the Act establishes a structured oversight architecture. A state-level committee chaired by the Chief Secretary will oversee departmental compliance. At the district level, the District Collector will lead monitoring. An apex council headed by the Chief Minister will oversee both tiers, providing political accountability at the top of the chain.

Notably, the Bill was amended during legislative debate to replace the term 'coordinator' with 'Secretary' — referring to the state's chief secretary — before being passed by voice vote, signalling that the oversight roles carry formal administrative weight rather than being advisory in nature.

Industry Response and Projected Impact

Industry stakeholders have broadly welcomed the legislation, describing it as a progressive step that positions Chhattisgarh as a forward-looking investment destination. The state government projects that the Act will attract fresh capital inflows and generate additional employment by lowering compliance costs and increasing procedural transparency.

This comes amid a broader national push by several state governments to improve their rankings in the Ease of Doing Business assessments, where regulatory efficiency and clearance timelines carry significant weight. Whether Chhattisgarh's implementation matches the ambition of the legislation will depend on how rigorously the three-tier monitoring mechanism is enforced in the months ahead.