For an effective planning of activities aimed at recovering aquifer depletion and maintaining health of groundwater ecosystem, estimates of spatial distribution in groundwater storage volume would be useful. The estimated volume, if analyzed together with other hydrogeologic characteristics, may help delineate potential areas for groundwater development. This study proposes a GIS-based ARC model to delineate potential areas for groundwater development; where 'A' stands for groundwater availability, 'R' for groundwater release potential of soil matrix, and 'C' for cost for groundwater development. The model is illustrated with a case of the Kathmandu Valley in Central Nepal, where active discussions are going on to develop and implement groundwater management strategies. The study results show that shallow aquifers have high groundwater storage potential (compared to the deep) and favorable areas for groundwater development are concentrated at some particular areas in shallow and deep aquifers. The distribution of groundwater storage and potential areas for groundwater development are then mapped using GIS.