Chhattisgarh Paves the Way with India's First Risk-Based Business Regulation

Chhattisgarh is pioneering a simplified business environment by enacting the country's first risk-based regulatory framework. The new legislation, aimed at easing business operations, particularly benefits MSMEs by reducing compliance burdens and expediting approval processes across 43 services initially, boosting transparency and efficiency.

Chhattisgarh has set a groundbreaking precedent as the first Indian state to implement a risk-based regulatory framework for businesses. This development comes in the wake of the Chhattisgarh Ease of Doing Business Act, 2026, which was passed by the Legislative Assembly.

The Act is designed to simplify government processes, lower regulatory burdens, and foster a transparent, business-friendly environment. It is expected to particularly benefit Micro, Small, and Medium Enterprises (MSMEs) by easing the process of establishing and operating businesses in the state.

The new law classifies industries into different risk categories, streamlining approvals for low-risk enterprises with simplified compliance criteria, and granting deemed approvals for larger industries if applications are delayed.

By enabling self-certifications instead of routine inspections, the legislation aims to cut compliance costs and boost efficiency. Entrepreneurs can self-declare compliance or obtain certifications from authorized professionals to accelerate approvals while maintaining accountability.

The Act removes the annual renewal requirement for many licenses, allowing entrepreneurs to concentrate on business expansion. Public services like water connections and building plan approvals have been simplified with self-declaration and expert certifications.

The Act initially covers 43 services across eight departments, with more services possibly added with Executive Council approval. A three-tier institutional mechanism ensures effective implementation, headed by state and district-level committees.

The reforms are expected to benefit 1.5 million MSME entrepreneurs in Chhattisgarh by decreasing the time and cost of doing business, while maintaining oversight of higher-risk sectors.