The overall economic objective of Government of Nepal has been reduction of widespread poverty. The Tenth Plan continues the emphasis on reduction of poverty as the overriding objective of plan. The target according to the Tenth Plan is to reduce poverty level to 30 % by 2007.The fact that the country failed to achieve the goal of poverty reduction during the Eight and Ninth Plan is attributed primarily to factors external to economy and lack of good governance. ( Dr. Meena Acharya, 2003)
Urban good governance is the most important factor in eradicating poverty and promoting sustainable development through improved good governance.
Although around 85 % of the population of Nepal still live in rural areas, urban centers are growing rapidly at a rate of up to 7 % per annum – the highest urban growth in the world . ( UDLE, 2003). Nepal becomes increasingly urbanized, focus to improve governance in town and cities has become very important.