At the time of liberation the present area of AJK was most undeveloped part of the State of Jammu & Kashmir and it remained as such till mid fifties when economic and social development process was launched though development plan and despite financial constraints efforts were made to provide sound base for development of the area.
In early sixties a planning cell with some skelton staff was established in the Finance Department by the State Government with the aim to focus upon development of area. Later on, the status of this cell was upgrade on full-fledged department in seventies (1972) with Sardar Muhammad Habib Khan as its first development Commissioner/Add. Chief Secretary (Dev.). The terms of reference (TORs) of the development were set forth as below:
a) Improvement of socio economic infrastructure through centralized Planning & Development.
b) Natural Resource Management through participatory approach for the purpose of income generation and poverty alleviation.
c) Human Resource Development.
d) Provide Social & economic services to the community.