Chhattisgarh first state to launch risk-based business framework

Chhattisgarh has passed the Ease of Doing Business Act, 2026, becoming the first state to introduce a risk-based framework. It aims to simplify rules, reduce compliance for MSMEs, and introduce self-certification and deemed approvals.

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".

Risk-Based Framework and Simplified Compliance

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.

Streamlined Services and Deemed Approvals

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.

Implementation and Oversight

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.

Expected Impact and Benefits

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)

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