Bhutan, a relatively small kingdom in the lap of the Eastern Himalayas is unique in many ways. It is a democratic kingdom where the king took the initiative to transfer his powers to the people. It is trying to enter the new millennium without compromising with its cultural values, age old traditions, and natural beauty. The development path it has selected does not pass through urbanisation and industrialisation; it passes through a judicious mix of rural and urban setting where human values reign supreme. And last but not the least it has given to the world a new measure of development known as gross domestic happiness (GDH). The kingdom stands first in GDH in South Asia and eighth in the World.

Bhutan is a country of highly dispersed village settlements isolated from each other or linked with mountain trails. People reside in the valleys and mountain slopes and eke out their living from subsistence farming. In a country of less than 700,000 inhabitants, the scope for the development of major cities is just not there. Thimphu, the capital of the country has around 80,000 inhabitants. Phuentsholing, on the south-west border, is the next city in the urban hierarchy of the kingdom. It has around 21,000 people. The other cities, or should we say, towns, having more than 5,000 people each are: Wangdue Phodrang located further east of Thimphu, Mongar in the central east, and Samdrupjongkhar on the south-eastern border with India (Fig. 14.1).