Tamil Nadu Proposes 21-Day Limit for Business Clearances

The Tamil Nadu government has introduced the Tamil Nadu Business Facilitation (Amendment) Bill, 2026 in the State Assembly. It is intended to propose a major alteration in the timeline of the processing of business and regulatory approvals. The Bill proposes that the time limit for the processing of various clearances be reduced to 21 days. This would be in cases where an existing legislation provides a period exceeding 21 days or where there is no time period specified in such laws. The Tamil Nadu Investment Promotion Commission, headed by the Chief Secretary, has been proposed to oversee large and strategically significant investments.

What Is the 21-Day Clearance Period?

According to the proposed amendment, in case of scheduled laws and subordinate legislations, wherein a time period is provided which exceeds 21 days, the period will be treated as 21 days.

A similar period of 21 days will apply in those instances where there is no provision of time period in the concerned legislation for processing a clearance.

It can assist the businesses in obtaining the approvals on a predictable time frame.

Holiday Periods Will Not Be Considered When Calculating 21 Days

The Bill explicitly excludes the periods of public and local holidays while calculating the period of 21 days.

But where the existing period is less than 21 days, it would continue to remain relevant even after the amendment.

There is another crucial exception which exists in the form of clearances covered under Central laws.

Central Laws Will Prevail

Where the time period prescribed in a Central law is more than 21 days, then the higher time period provided for by the relevant Central law will be applicable.

This ensures that the state law cannot override any timelines set out in relevant Central laws.

Proposed Formation of Tamil Nadu Investment Promotion Commission

Additionally, The Bill proposes setting up the Tamil Nadu Investment Promotion Commission which will be a high-level organization for monitoring important investments.

The Chief Secretary of Tamil Nadu shall be the Chairman of the Commission.

Proposed functions of the commission shall be monitoring investments that,

• Require capital investment of ₹200 crore or more
• Require creation of employment for 5,000 or more employees
• Are connected with free trade agreements
• Have persons of Tamil origin residing outside India
• Belong to any other category notified by the State Government