Nepal’s urbanisation level is low and much of its urbanisation is induced. Twenty seven per
cent of Nepal’s population lived in 130 designated urban areas or municipalities in 2014. This
chapter discusses the current level of urbanisation at the national, regional and district level
using data from the population and housing census of 2011 in particular, and earlier censuses
in general. Designated municipalities are referred to as urban areas and 7.2 million people live
in such municipalities currently. Despite a low level of urbanisation, the annual growth rate of
the urban population is 8%, about 6 times higher than the national population. This growth rate
is mainly due to the additions in the number of municipalities during the intercensal periods.
Regional differences are evident with the central development region and Tarai being more
urbanised than mid-west and Mountain. Urban areas of 20,000 to 49,999 people dominate in
number and population share. The urban population is relatively mature and literate compared to the
rural population. Most of the urban areas, especially those newly declared and those in the Mountain
and mid-and far-west, have a rural character in respect to physical facilities, literacy, occupational
structure and educational attainment. Population size appears to be the prime criteria for designating
urban areas and there is a need to come up with a more functional and economic criteria so that it
also reflects urbanism, a missing dimension in urban designation in Nepal.