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I have implemented private chain in ethereum but its difficulty level increases by time as a result the mining process slows down. Is it possible to make the difficulty static or disable it in testnet.

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Modify the CalcDifficulty in Geth to return a static number, then rebuild Geth. Example:

func CalcDifficulty(config *ChainConfig, time, parentTime uint64, parentNumber, parentDiff *big.Int) *big.Int {
    return big.NewInt(0x4000)
}

Source: Answer to Is it possible to change the block target time?

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    Is this still the only way to decrease the difficulty? – Thorkil Værge Apr 28 '18 at 18:40
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    @ThorkilVærge I usually won't answer/reply if I don't know. But I'm doing so here since I'm not ignoring the question, and would encourage if there are new answers. – eth♦ May 3 '18 at 7:41
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If it is private chain you can define difficulty in genesis block.

Something like this 

{
  "nonce": "0x0000000000000042",
    "mixhash": "0x0000000000000000000000000000000000000000000000000000000000000000",
    "difficulty": "0x4000",
    "alloc": {},
    "coinbase": "0x0000000000000000000000000000000000000000",
    "timestamp": "0x00",
    "parentHash": "0x0000000000000000000000000000000000000000000000000000000000000000",
    "extraData": "Custem Ethereum Genesis Block",
    "gasLimit": "0xffffffff"
}

Here is a good read to How to Set up testnet

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    I have used this format only. Initially the mining is fast but as the time flows the difficulty increases and mining goes very slow. – Abhishek Ranjan Jul 18 '16 at 7:19
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    The difficulty is adjusted automatically so the average block time is within the hard-coded time in ethereum. The difficulty you specify in the genesis file is just the starting difficulty. To make difficulty static you need to modify the source code. – dragosb Jul 18 '16 at 12:42
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    @dragosb yeah, but OP is not asking for the dynamic settings. – niksmac Jul 18 '16 at 12:48
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    what genesis block has to do with difficulty as it is only to create inital blockchain . difficulty is measured by CalcDifficulty algo. – Himanshu sharma Dec 5 '16 at 12:18
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    @Himanshusharma I understand that. OP is asking about creating the initial set up. – niksmac Dec 5 '16 at 16:16

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