Nepal's growth has hindered severely due to Kathmandu remaining such a centralized capital city. It's a joke that so many govt. related issues can't get settled without traveling to Kathmandu. Decentralization would be a welcome move in my opinion, and I'd quite welcome Chitwan as the new Capital. 

I was baffled to witness the sad and pathetic state of affairs when I went to Birgunj during my last trip to Nepal (first trip outside the valley). I'd imagined it being a 'developed' city, clean and what not as it's one of the major trade hubs in the country. Instead, bullock carts, dirty streets and overall a very eerie looking environment told me otherwise.