Chhattisgarh becomes first state to adopt risk-based Ease of Doing Business Act
Raipur, July 16
Chhattisgarh has become the first state in the country to introduce a risk-based regulatory framework for businesses after the Legislative Assembly passed the Chhattisgarh Ease of Doing Business Act, 2026 on Thursday.
According to an official statement by the state government, the new Act aims to simplify government procedures, reduce the regulatory burden on businesses and create a transparent and business-friendly ecosystem.
It stated "The new legislation marks a significant step towards simplifying government procedures, reducing regulatory burden, and creating a transparent and business-friendly ecosystem. The reforms are expected to benefit Micro, Small and Medium Enterprises (MSMEs) the most by making it easier to establish and operate businesses in the state".
Under the new law, industries and businesses will be classified into different risk categories based on the nature and scale of their operations. Low-risk enterprises will receive faster approvals and simplified compliance requirements, while larger industries will be granted deemed approvals if their applications are not processed within the prescribed timelines.
The framework seeks to ensure that smaller businesses are not subjected to the same level of regulatory compliance as large industrial establishments.
To reduce compliance costs and improve efficiency, the Act allows low-risk businesses to submit self-certifications instead of undergoing routine government inspections.
Entrepreneurs can either self-declare compliance with applicable regulations or obtain certification from licensed engineers, architects or other authorised professionals. The move is expected to speed up approvals while maintaining transparency and accountability.
The legislation also removes the requirement for annual renewal of licences and permits in many cases by introducing a simplified, risk-based compliance system. This is expected to allow entrepreneurs to focus more on expanding their businesses and operations.
Several public services have also been simplified under the new framework. Entrepreneurs will be able to obtain water connections through self-declaration, industrial society registrations will be completed within prescribed timelines, and building plan approvals can be secured through self-certification or certification by authorised experts.
In specified cases, applications that are not processed within the stipulated time will automatically receive deemed approval.
In the first phase, 43 services across eight departments will be brought under the provisions of the Act. More services may be added later with the approval of the Executive Council.
To ensure effective implementation, the Act provides for a three-tier institutional mechanism. A State-Level Committee chaired by the Chief Secretary and District-Level Committees chaired by the respective District Collectors will oversee implementation under the overall guidance of an Executive Council chaired by the Chief Minister.
According to the state government, nearly 1.5 million MSME entrepreneurs across Chhattisgarh are expected to benefit from the reforms. By replacing frequent inspections with a system based on trust, self-certification, risk-based regulation and time-bound service delivery, the Act is expected to reduce the time and cost of doing business while ensuring effective oversight of higher-risk sectors.
— ANI
Reader Comments
This sounds promising, but I'm cautious. India has a history of creating good laws on paper that don't translate to ground reality. The real test will be how the three-tier mechanism actually functions. Will the bureaucrats let go of their control? I hope I'm wrong, but I'll believe it when I see it.
Great move by the Chhattisgarh government! 👏 Finally reducing the inspector raj which has been choking small businesses. Self-certification and risk-based compliance will really help our local entrepreneurs. Hope this model spreads across India. Jai Hind! 🙏
As someone who has invested in MSMEs in multiple states, this is a breath of fresh air. The point about 43 services across 8 departments is key—if they can actually streamline that many touch points, it will save entrepreneurs months of time. Let's see if Chhattisgarh can become a model for ease of doing business in India.
A small but significant step. The devil is in the details—how will they classify 'low-risk' and 'high-risk' businesses? Will there be a transparent criteria? Also, what about grievance redressal if approvals are denied? Still, it's better than the current mess. Chhattisgarh is setting a good example for other states.
This is the kind of reform we need more of in India. Moving from a system of mistrust to one of trust-based compliance will encourage more people to start businesses instead of running after licenses. Especially for women entrepreneurs who often find it harder to navigate bureaucracy. Good job, Chhattisgarh!
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