In the process of forest management, His Majesty's Government has been handing-over some part of the national forest as a leasehold forest to the individuals or group of the people or to the corporate bodies for the: production and sale of forest products; production of raw materials for the forest based industries; protection and development of forest for the eco-tourism business; agro-forestry purposes as well as for insect or wild life farming; over a time bound period of time with the charge of royalty. Leasehold forest management programme has been implemented since the last few years with the objective of uplifting the quality of the livelihoods of people living below the poverty line through sustainable and wise use of the forest resources. The programme has been further enhanced by guaranteeing the acquisition of raw material from forest products for accelerating industrial development and promotion of the concept of eco-tourism. Some policy related and legal frameworks have been already built up.

In spite of legal provision regarding leasehold forestry in chapter six of Forest Act, 1993 and chapter five of Forest Regulation, 1995, leasehold forest have not been able to be transferred substantially for other purpose except under the program of poverty alleviation for the family living below poverty line. At the present only twenty-five applications requesting forests on lease basis are under the consideration in the Ministry. The quality of shrub land have also not been able to be upgraded. Dense forests are being degraded due to encroachment and other reasons. Government efforts alone are in appropriate for making improvements. It is possible to increase the participation of the private sector in a transparent way according to the legal provision of Forest Act and Regulation for the management of forests and natural resources in areas wherever the forests are degraded, rehabilitated forest areas destroyed by natural disaster & forest returned from encroacher. It will help to increase the base of productive area and accelerate economic activities & should help to enhance the broad based economic growth rate as well as assist other sector through conservation of watershed area & environment.