(1) For social, cultural protection or economic development, the Government of Nepal may, in consultation with the provincial government, establish a special, protected or autonomous area for any of the following areas by publishing a notice in the Nepal Gazette:-
(a) any one or more districts,
(b) any one or more village councils or municipalities,
(c) any one ward or more than one ward of any rural municipality or municipality.
(2) According to sub-section (1), when establishing a special, protected or autonomous area, it shall be taken on the following basis.
(a) For special area
(1) Being geographically remote due to lack of transportation and infrastructure,
(2) the percentage of the population below the poverty line and the inequality of poverty is higher than the national average,
(3) Predominance of economically and socially backward communities,
(4) Any other basis deemed appropriate by the Government of Nepal.
(b) For Protected Area
(1) inhabited by minority, marginalized or displaced communities,
(2) The social and economic development index of the community as per subsection (1) is lower than the national average,
(3) Any other basis deemed appropriate by the Government of Nepal.
(c) For Autonomous Region
(1) having a dense presence and plurality of communities having the same language or culture,
(2) The social and economic development index of the community as per subsection (1) is lower than the national average,
(3) Any other basis deemed appropriate by the Government of Nepal.