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«Key words: SUMMARY The paper is making an attempt to assess the current regional and urban planning policies and programmes of Nepal and conclude by ...»

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An Assessment of Regional and Urban Development Policies and

Programmes of Nepal

Tej Kumar KARKI, Nepal

Key words:


The paper is making an attempt to assess the current regional and urban planning policies and

programmes of Nepal and conclude by recommending measures for sustainable urbanization

policies. First, the paper reviews all the five year national plans, urban development related

policies and programme documents to see their continuity on the policy commitment over time and the degree of budgetary support to the regional and urban planning policies; assess the inter-agency coordination and the coordination between spatial and economic or sectoral policies. Second, the paper reviews the annual reports, evaluation mission reports, quarterly newsletters of the Rural Urban Partnership Programme (NEP/96/003) supported by UNDP/UNCHS to identify the extent of rural urban linkage the programme has generated.

Third, on the basis of the reviews, the paper highlights various regional and urban planning issues and, finally concludes by recommending policy measures for regional and urban development, urban economic development, urban planning and rural urban partnership programmes.

The paper contains eight sections. The sections are sequenced as: introduction, regional planning policies, urbanization and economic development policies, urban planning practice, urbanization policies and programmes to improve rural urban linkage, rural urban partnership programme, policy issues and conclusion.

1/13 TS24 – Planning, Valuation and the Environment Tej Kumar Karki TS24.5 Regional and Urban Development Policies and Programmes of Nepal FIG Working Week 2004 Athens, Greece, May 22-27, 2004 An Assessment of Regional and Urban Development Policies and Programmes of Nepal Tej Kumar KARKI, Nepal

1. INTRODUCTION Nepal is a country of 23 million people and 1, 47,000 sq. km. of area; linear in shape, stretching 500 km east-west and 290 km north south. Geographically, the country is divided into three regions: Mountain, Hills and Tarai (plain area) and administratively, the country is divided into five development regions: eastern, central, western, mid-western and far western.

Besides Kathmandu Valley, the entire territory of the nation was basically a rural and remote region around the 10th century AD. Only after the unification of the petty state into one Nepal in 1769, east to west and north to south hill trails were developed for administrative purposes. These trail later, became the major basis of urbanization in the hills. The deployment of administrative units and military garrisons in the strategic nodes along the trails encouraged the evolution of towns in the hills.

Until, 1951, Tarai1 was largely a forest area without any roads and infrastructure but full of malarial diseases. After the eradication of malaria in 1951, Tarai became an attractive place for migrants from hills with increasing population pressure on the limited arable land. The rapid hill to Tarai migration accelerated the process of urbanization in Tarai. Every year 54,000 rural people migrate to urban areas of Nepal. Half of them move to Kathmandu Valley and rest half to major Tarai Towns (Urban Development through Local Efforts, 1998).

In 1981, twenty three municipalities accommodated 6% of the nation’s population. Today, the number has reached to 58 by accommodating 14% of the nation’s population or 3.3 million people and, with an average annual urban growth rate of 6.65% (Central Bureau of Statistics, 2001).

Table 1: Urbanization trend in Nepal

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FIG Working Week 2004 Athens, Greece, May 22-27, 2004


Since 1956, Nepal has been implementing periodic plans (five year national plan). While all the earlier five year plans followed controlled economic policies, the Fifth Five Year Plan (1975-1980) came up with regional planning objectives. The objectives of the plan were to increase productivity, make maximum use of labour power and ensure regional balance and integration. To achieve regional balance, the nation was divided into five development regions along with the introduction of the concept of growth axis: a series of north south development corridors linking diverse regions (Tarai, Hills and Mountains). The idea behind this was to permit economic viability and to generate complementary interregional exchange of goods and services.

This regional approach to planning did provide some territorial framework for rural development but failed to generate interregional exchange of various economic functions and merely served as an administrative centre. The devolution of power to small territories was still lacking and the sectoral investments were still biased toward Tarai and Kathmandu Valley. As a result, these regional centres located in the mid hills failed to retain hill population; the rural to urban and Hill to Tarai migration continued and diluted the fundamental principles of regional development.

Consequently, the regional policy commitment did not receive continuity in the successive five year national plans. The regional planning objective disappeared from the list of objectives of the sixth plan and emerged only in the eighth plan where the need to reduce regional balance was restated. Again, it disappeared from the ninth and the tenth plan (2002where poverty alleviation was the only objective (National Planning Commission, 2002). None the less, the urban development chapters of the ninth and tenth plans did continue to mention the need of rural urban inter- relationships.


3.1 Urbanization Policy In Nepal there is no urban policy as such developed with a specific intention to enhance the economic development. The five year national plan2 document is only the basis of our urbanization policy. The Ministry of Physical Planning and Works through its Department of Urban Development and Building Construction (DUBDC) implements urban development plans and programmes in Nepal. The Ministry of Local Development (MLD) is responsible to administer the programmes of local governments such as municipalities and Village Development Committees. The MLD does only the administrative and personnel management function of the local government but has no capacity to assist for preparing physical development plans; for which it has to rely on the DUDBC. However, the exchange of cooperation is too weak.

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FIG Working Week 2004 Athens, Greece, May 22-27, 2004 Urbanization, as a process, is less influenced by policies pursued in the urban sector and more by the combined effect of sectoral policies in Nepal. The more urban policy influencing sectoral policies belong to the Ministry of Local Development, Finance, Industry, Tourism, Trade and supplies, Agriculture, Education, Health and Water resources. The government’s roads and transportation policies, local development policies, fiscal and economic policies, industrial policies, tourism policies, agricultural policies, health policies, education policies have largely influenced the nature and type of urbanization in the country. Location of new economic activities and population movement influence the pattern of urban development and affect the efficiency of national economies and the stability of the political systems.

(Sharma, 1998). In reaching decisions on a whole range of sectoral policies in the future, the urban implications will have to be considered (Watts, 1992:118)

3.2 Economic Development Policies

The urban economy in Nepal is growing at faster rate than the rural economy or the overall economy. As a result, predominantly rural activities are shrinking while predominantly urban activities like industry and services are growing more rapidly. The urban economy is estimated to have grown twice the rural economy per annum (ADB, 2000). The average income of urban population is 4.6 times higher than the rural income and the contribution of urban sector to the GDP is 60%.

The Eighth Plan (1992-1997) made the departure from the past controlled economic policies of Nepal by adopting the liberal and market oriented policy. The assigned government’s role was of a facilitator of economic activities and promoter of private sector for development of physical infrastructure and social sector (National Planning Commission, 1998:72). In early 1993, Nepal undertook a series of reforms aimed at economic liberalization. Real GDP grew by 7.3% buoyed by a strong recovery in agriculture sector in 1993/1994. Industry sector growth recovered strongly to 9% (1993/94) from 4.8% (1992/93). Recent public policy has been to encourage investment of private and foreign capital in core economic sectors. In 1993/94, it is estimated that domestic savings and investment increased to 14.7% and 22.4 % of GDP respectively (ADB, 2000).

The fiscal policy 2000 has emphasised a major restructuring of the tax and expenditure system. Measures have been directed at mobilising additional public savings to support high priority infrastructure and social investments while reducing government borrowing to control growth of domestic debt. Government revenue has increased faster than expenditure through broadening of the tax base, simplifying and increasing the transparency of the tax system, improving tax administration, and increasing emphasis on direct as opposed to indirect taxes including the introduction of VAT (value added tax). Very soon Nepal is going to be the member of WTO (World Trade Organization).

Lot of private universities, colleges, industries, real estates and apartment developers emerged as a result of various economic reforms in the eighth plan period and, accelerated the pace of urbanization through out the nation. In the absence of land use strategy and policy, haphazard proliferation of education institutions, nursing homes, industries and real estates in incompatible locations have invited serious environmental problems in Kathmandu 4/13 TS24 – Planning, Valuation and the Environment Tej Kumar Karki TS24.5 Regional and Urban Development Policies and Programmes of Nepal FIG Working Week 2004 Athens, Greece, May 22-27, 2004 Valley and other rapidly urbanizing towns. However, the mechanism to address the urban implication of all these activities has not been fully developed.


Around 1970s, land use plan for all the five regional centres were prepared and a detailed physical development plan of government’s institutional area were made and implemented.

Similarly few towns were established in Tarai by clearing some forest lands. Attempts were also made to implement a physical development plan in Kathmandu Valley but it could not materialize due to lack of political commitment. In 1970s two sites and services projects were implemented in the valley. Besides these events, land use regulation is no more practiced in the urban areas of Nepal; land is mostly developed by individual’s decisions and the development pattern is mixed: residential cum commercial. The existing building bye laws is only the basis of development control in Kathmandu Valley and, some form of such bye laws are also implemented by rest of the municipalities. Besides the bye laws enforcement, two local area planning measures: land pooling (readjustment) and guided land development programmes have been widely implemented in the valley.

The MPPW is the highest level of government organization responsible for physical planning tasks. Under this ministry, the DUDBC implements various urban development projects through its 23 division offices located in various parts of the country. Preparing plans and enforcing building codes and apartment ownership acts are some of their tasks besides repair and maintenance of buildings and infrastructures. A Kathmandu Valley Town Development Committee (KVTDC) is responsible for planned urban development in the valley. At present, KVTDC is confined to the enforcement of building bye laws and implementation of land pooling (readjustment) projects and guided land development (GLD) programmes. Today, 11 land pooling projects have been implemented and about 280 km of GLD roads have been opened in the Kathmandu Valley.

The Town Development Act 1988 provides the legal basis for implementing town development plans. The Act has empowered both the central and local government agencies to carryout the land pooling projects (His Majesty’s Government of Nepal, 1988). The Local Self Governance Act 1999 also provides the municipalities and the Village Development Committees to carryout town development plans but it is not comprehensive enough to carry out town planning as compared to the Town Development Act 1988.


For the first time a more specific rural urban linkage related programmes were embedded in the urban development chapter of the Seventh Plan (1985-1990). It had presented the concept of service centre with an objective to establish the focal points (nine service centres in each district) for rural development. It envisaged developing three tier of urban hierarchy: regional level (development region), sub regional level (Tarai, Hill and mountain areas of each development region) and service centres (district level). The idea was to provide a base for absorbing surplus rural populations and promotion of off farm employment and economic 5/13 TS24 – Planning, Valuation and the Environment Tej Kumar Karki TS24.5 Regional and Urban Development Policies and Programmes of Nepal FIG Working Week 2004 Athens, Greece, May 22-27, 2004 development (PADCO, 1990:105). However, the democratic movement in 1990 completely wiped out these concepts of urban based rural development policies strategies and programs.

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