"Civil Surgeon (Dr Amar Singh Vishnar) of Barwani stands suspended," Chouhan told reporters at the MP Assembly campus here.
The CM also announced that those affected will be provided with Rs 2 lakh each and that the state government will foot their treatment expenditure.
An inquiry into the incident in underway and the guilty will be punished, he said.
"The inquiry will reveal what went wrong during the government camp which resulted in loss of vision. We have taken the incident seriously and are dealing with it in the same manner," Chouhan added.
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The patients had undergone cataract surgery at a camp organised by Andhatva Nivaran (blindness eradication) Committee of Barwani district hospital between November 16 and 21.
The matter came to the light after they complained of inflammation, itching and low vision after the surgery, and were referred to government M Y hospital and private Aurobindo hospital in Indore.
Last week, the government had suspended seven persons, including Dr R S Palod, the surgeon under whose guidance the camp was organised.