The Assembly on Tuesday passed the Puducherry Business Reforms Bill, 2026, aimed at improving the overall environment for doing business and starting industries in the Union Territory.The legislation, introduced by Minister for Industries Malladi Krishna Rao, marks a decisive shift in government’s approach from permission-based control to rule-based governance in dealing with business regulations.A note from the Industries Department said the reforms were aimed at creating an environment where entrepreneurs were allowed to focus on starting business, expanding operations, generating employment and creating economic value, rather than spending their valuable time navigating complex and repetitive regulatory procedures.One of the key features of the legislation, the note said, was the thrust given to MSMEs and to encourage entrepreneurship. The existing framework for exemption from approvals for MSMEs will be strengthened by extending the moratorium period to five years, with provision for a further one-year extension.The introduction of auto-generation of the Acknowledgement Certificate when it was not issued within the prescribed time will further enhance certainty and eliminate avoidable administrative delays.The legislation also proposes greater flexibility in land use and development regulations, adoption of a Negative List approach, rationalisation of building and zoning requirements and mechanisms for identifying and eliminating duplicative, obsolete and disproportionate compliances. The measures could reduce regulatory burden, procedural delays and cost of doing business, the note said.CII welcomes legislationThe Confederation of Indian Industry, Puducherry chapter, has complimented the government for bringing out such a pro-business legislation. “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,” M. Nadarajan, Chairman, CII Puducherry said in a release. Published - August 25, 2026 08:27 pm IST