The study of Revenue and Expenditure Policies of Nagaland revealed that the growth of Public Expenditure greatly outpaced the growth of Public Revenue since the inception of statehood (1963). The reasons being attributed to mounting increase in expenditure in the pretext of economic development coupled with political instability. On the other hand, it was observed that there has been low tax base which was aggravated by laxity of tax efforts. Hence, anomalies of revenue and expenditure policies were evident in course of our investigation.
The given findings therefore call for a thorough and deeper investigation as to what factors determine tax and expenditure beginning from 1963 to 2001. The present study employed both Economic and Political (dummy) variables and a suitable statistical technique (regression equations by method of Least Square) was adopted to test the Hypotheses and role of each variable responsible for disproportionate growth in Revenue and Expenditure in the State of Nagaland.