Before the creation of HUDA, the Urban Estates Department (U.E.D.) which was established in the year 1962, used to look after the work relating to planned development of urban areas and it functioned under the aegis of the Town & Country Planning Department. Its functioning was regulated by the Punjab Urban Estates Development and Regulations Act, 1964 and the rules made there under and the various development activities used to be carried out by different departments of the State Government such as PWD (B & R), Public Health, Haryana State Electricity Board etc. With the passage of time, it was experienced that the involvement of several agencies in the development of Urban Estates at various places was suffering from lack of coordination, with the result that growth of most of Urban Estates slowed down and caused unnecessary dis-satisfaction to the plot-holders in particular and public in general. Besides, as the Department had to follow the financial rules and regulations of Government, the arrangement of funds and sanction of estimates used to take a long time and the development works did not keep pace with the required standards of physical achievements.