If you run a business in Chandigarh — or plan to start one — a law is coming your way that could fundamentally change how you deal with government departments. Chandigarh has proposed to extend the Punjab Right to Business Act, 2020 — amended and strengthened further in 2025 — to the Union Territory through the Ministry of Home Affairs. The Department of Industries has already prepared a draft notification to make it happen.
The proposal was formally recommended by Punjab Governor and UT Administrator Gulab Chand Kataria to Union Home Minister Amit Shah during his meeting in New Delhi recently. It is part of the Centre’s Deregulation Exercise 2.0, aimed at stripping out needless regulatory friction from business life.
What is the Punjab Right to Business Act?
The Punjab Right to Business Act, 2020 — passed by the Punjab Legislature and later significantly amended in 2025 — is a landmark law that turns ease of doing business from a policy aspiration into a legal right.
Put simply, the Act gives every eligible enterprise a statutory entitlement: to receive clearances on time, to not be inspected without proper notice, and to get an automatic deemed approval if the government fails to respond within the prescribed deadline. It replaces the current regime where a business owner must approach each department separately, wait indefinitely, and has no legal recourse if an approval is simply sitting on someone’s desk.
The law applies to a wide range of businesses — manufacturing units, IT parks, food processing facilities, biotech parks, SEZs, industrial estates, commercial establishments and others — defined under the Act as “Eligible Enterprises”. Notably, the Chandigarh-specific draft notification includes an important addition: miniplexes located in zones designated for commercial or entertainment use under the city’s master plan will also be eligible — a change that is more liberal than Punjab’s version.
What does Chandigarh currently follow?
At present, Chandigarh has no single comprehensive law that legally mandates time-bound clearances or provides for automatic approvals. Businesses must navigate a patchwork of central and UT-level laws individually: the Punjab Municipal Corporation Act, 1976, for building sanctions; the Factories Act, 1948, for factory licences; the Shops and Commercial Establishments Act for shop registration; the Water and Air Pollution Acts for environmental clearances; separate bye-laws for electricity and water connections — and so on.
Each of these departments operates on its own timeline. There is no single point of contact, no legal guarantee of a response within a fixed period, and no deemed approval if a department goes silent. While the Chandigarh Administration has been implementing administrative reforms — scoring 89 per cent on the Centre’s Business Reform Action Plan 2025, up sharply from 71 per cent in 2022 — these remain executive reforms, not legal rights. A business owner who does not get an approval on time has no statutory remedy under current UT law.
That is precisely the gap the Right to Business Act is designed to close.
What the Act entails: Key provisions
- Certificate of In-Principle Approval — your business gets a green signal on day one
Under the Act, any eligible enterprise can file a declaration of intent and receive a certificate of in-principle approval, which allows it to begin setting up operations without waiting for all individual clearances to come through. Think of it as a single “yes, you may proceed” from the administration — with individual approvals following on a fixed timeline.
- Deemed approvals — silence means yes
This is the most powerful provision. If a competent authority fails to grant or refuse an approval within the prescribed time limit, the approval is automatically deemed to have been granted. There is no ambiguity, no follow-up required, no running from office to office. The deemed approval is automatically generated on the single-window portal — without any manual intervention by any official.
- Right against harassment: Inspection rules tightened
Currently, an inspector from any department can visit a business whenever they choose. Under the Right to Business Act, this changes. No inspection can take place without 48 working hours prior notice to the enterprise. Crucially, the inspecting officer or team must be of the rank of Joint Director or equivalent or above — a provision specifically designed to ensure accountability and prevent low-level harassment. Every inspection report must be uploaded on the state single-window system within the prescribed timeframe.
- Refusal must be in writing, with reasons
Under the Act, an authority can refuse to issue a certificate of in-principle approval only if the proposed enterprise falls in an expressly prohibited category or if the declaration of intent is found to be materially deficient. Critically, refusal must be in writing, with reasons recorded and communicated to the applicant within the prescribed period. Arbitrary or silent refusals are no longer an option.
- Full digitisation and a single window for everything
Filing a declaration of intent, tracking application status, receiving approvals, reading inspection reports, lodging grievances — everything must be done through a designated online single-window portal. The portal must be integrated with all competent authorities empowered to grant approvals. There is no more need to visit multiple government offices or submit paper applications to different departments.
- Eleven clearances brought under one umbrella
The draft notification lists 11 approvals that will be covered under the Act for Chandigarh, bringing them under a single mandatory time-bound framework:
— Building plan sanction and occupation and completion certificates (MCC and Estate Office)
— Fire NOC (MCC)
— Factory building plan approval (Labour Department)
— Shop and commercial establishment registration (Labour Department)
— BOCW (construction workers) registration (Labour Department)
— Factory licence for units with more than 50 workers (Labour Department)
— Consent to Establish and Consent to Operate for green, orange and white category industries (Chandigarh Pollution Control Committee)
— Forest land NOC (Forest Department/MoEFCC)
— New electricity connection and load enhancement (Chandigarh Power Distribution Limited)
— Water supply and sewerage connections (MCC)
The new institution: Chandigarh Bureau of Enterprise & Investment
The Act mandates the creation of a dedicated nodal institution — the Chandigarh Bureau of Enterprise and Investment — which will be the single point of contact for all businesses seeking approvals. The Secretary Industries, UT Chandigarh will head it as Chief Executive Officer, with the Director Industries as Additional Chief Executive Officer. The Industries Department will serve as its secretariat.
The Bureau’s functions include facilitating approvals, redressing business grievances, creating awareness, coordinating between UT and Central departments, and ensuring expeditious clearance of all investment proposals — both regulatory and fiscal.
Who is behind it?
The proposal has been driven by the Department of Industries under Deputy Commissioner Nishant Kumar Yadav, who also holds charge as Secretary Industries. Yadav has been the nodal officer overseeing Chandigarh’s deregulation exercise and anchored the proposal through the two-phase compliance-reduction drive mandated by the Cabinet Secretariat.
“Bringing a rights-based law to Chandigarh sends a clear signal that we are serious about ease of doing business — not just as a ranking exercise, but as a legal guarantee to every entrepreneur,” Yadav told The Tribune.
The recommendation goes to the Ministry of Home Affairs for central government notification, as Chandigarh is a Union Territory without its own legislature. Extension of Punjab laws to the UT is done under Section 87 of the Punjab Reorganisation Act, 1966 — the same legal route used for a large part of Chandigarh’s existing law book.
What it means in plain words for businesses
For Chandigarh’s 65,164 MSME units — employing nearly 4.69 lakh people — and for every new entrepreneur seeking to set up shop, the Right to Business Act means:
— One portal. One application. One point of contact.
— A legal right to receive approvals on time — not a hope, but a statutory entitlement.
— Automatic approval if the government misses its own deadline.
— No more surprise inspections; adequate notice, senior officer, written report.
— No more silent refusals; every rejection must be in writing with stated reasons.
— A dedicated Bureau to hold your hand through the process — and to hear you out if something goes wrong.
What happens next
The draft notification prepared by the Department of Industries is with the Ministry of Home Affairs for central government issuance. Once notified, the Chandigarh Administration will establish the Chandigarh Bureau of Enterprise and Investment by official gazette notification, designate the single-window portal, and integrate all competent authorities into the system.
Speaking to The Tribune, the Governor-cum-Administrator Kataria backed the move unambiguously. “What businesses need is certainty. Certainty that their applications will be cleared on time, that they will not be harassed, and that help will be available when they need it. Bringing a rights-based law to Chandigarh delivers exactly that,” he said.
For a city that was ranked in the “Aspirers” — the bottom bracket — of the Centre’s ease of doing business assessment as recently as 2022, the move marks a significant shift in ambition. Chandigarh is no longer just reforming its processes. It is writing those reforms into law.
