Puducherry Assembly Passes Business Reforms Bill 2026 to Ease Regulations
The Puducherry Legislative Assembly on Tuesday passed the Puducherry Business Reforms Bill, 2026, a legislation designed to simplify the regulatory framework for businesses and industries in the Union Territory.
The Bill, introduced by Industries Minister Malladi Krishna Rao, marks a decisive shift from permission-based control to rule-based governance in dealing with business regulations. According to an official note from the Industries Department, the reforms aim to create an environment where entrepreneurs can focus on starting and expanding businesses, generating employment, and creating economic value, rather than spending time navigating complex and repetitive regulatory procedures.
The legislation gives particular emphasis to micro, small, and medium enterprises (MSMEs) and to encouraging entrepreneurship. The existing framework for exemption from approvals for MSMEs will be strengthened by extending the moratorium period to five years, with a provision for a further one-year extension. Additionally, the Bill introduces auto-generation of the Acknowledgement Certificate when it is not issued within the prescribed time. This is intended to enhance certainty and eliminate avoidable administrative delays.
The Bill also proposes greater flexibility in land use and development regulations, the adoption of a Negative List approach for approvals, rationalisation of building and zoning requirements, and mechanisms for identifying and eliminating duplicative, obsolete, and disproportionate compliances. The Negative List approach means that activities not specifically listed for approval would be automatically permitted, reducing the need for prior clearances. These measures are expected to reduce the regulatory burden, procedural delays, and the overall cost of doing business in Puducherry.
The Confederation of Indian Industry (CII), Puducherry chapter, has welcomed the legislation. M. Nadarajan, Chairman of CII Puducherry, said in a release, “It is a progressive and facilitation-oriented reform agenda. The proposed measures reflect a clear shift towards trust-based governance and could significantly improve investor confidence and Puducherry’s competitiveness as an investment destination. The CII will play a catalytic and constructive role in supporting the government in taking the reforms forward and bring tangible outcome. We look forward to an approach which is more collaborative in making the territory an investment-friendly place.”
The passage of the Bill comes amid broader efforts across Indian states and Union Territories to improve business environments. By moving towards rule-based governance and reducing compliance burdens, the Puducherry government aims to make the territory more attractive to investors while ensuring that regulations remain transparent and predictable. The legislation is now expected to be sent to the Lieutenant Governor for assent, after which it will come into effect.
