No more waiting, Chandigarh moves to let MSMEs start operations instantly

The UT’s fresh proposal, modelled on the Punjab Right to Business Act, 2020, seeks to exempt new units from obtaining prior approvals and protect them from inspections

In a move aimed at improving the ease of doing business, the Chandigarh administration has sent a proposal to the Ministry of Home Affairs (MHA) seeking approval to allow new micro, small and medium enterprises (MSMEs) to begin operations immediately on the basis of self-declaration.

The process often takes one to three years, leading to delays that disproportionately affect the small traders more. (HT PHOTO)

Currently, entrepreneurs are required to obtain multiple licences and no-objection certificates from fire, pollution, labour and municipal authorities before starting operations. The process often takes one to three years, leading to delays that disproportionately affect the small traders more.

The UT’s fresh proposal, modelled on the Punjab Right to Business Act, 2020, seeks to exempt new units from obtaining prior approvals and protect them from inspections by any UT authority for an initial period of three years and six months. This, officials say, would create a more investor-friendly environment in the UT and prevent exodus to neighbouring cities.

In-principal nod to be granted within 15 days

While MSMEs will have over three years to secure full statutory clearances, they will have to get in-principle approvals, which will be granted within 15 days. The idea is to allow entrepreneurs to begin setting up infrastructure, including buildings and machinery, while applying for statutory clearances in parallel.

In terms of sectoral composition, MSMEs in Chandigarh broadly fall into three categories—services, trading, and manufacturing. Chandigarh currently has around 65,000 MSMEs, the majority of which fall under the micro category and are concentrated in the services and trading sectors.

Despite the large number of registered units, industry stakeholders say there are multiple regulatory hurdles and barriers to entry, which drives new enterprises away from the city.

Avi Bhasin, president of Laghu Udyog Bharti, said that many industrialists have shifted to nearby areas like Panchkula and Mohali due to policy gaps and administrative challenges. He added that over 80% of Chandigarh’s industries are now service-oriented, but they often face restrictions in operating within industrial areas. Bhasin said adopting the Punjab model could revive the city’s industrial ecosystem and provide much-needed relief to small entrepreneurs.