In Nepal the incidence of poverty has declined but the numbers of absolute poor are increasing. Government interventions have not been successful to reduce wide variation between rural and urban poverty because of the absence of rural-urban economic linkages, inaccessibility, and inadequate investment in the underdeveloped areas. The incidence of poverty is higher for occupational caste groups such as Damai, Sarki and other untouchables. Institutional constraints have deprived poor to get access to resources making it a major cause for Maoist insurgency. The paper therefore, attempts to provide an overview of poverty alleviation initiatives including the impact of targeted programmes. It also briefly analyses the agriculture sector reform and its implications on food security and poverty