This paper examines the nexus between tax revenues and government expenditures for India using annual data from 1990 to 2011. Popular cointegration techniques like Engel-Granger cointegration test and Johensen cointegration test are used to check long-run stable equilibrium relationship between tax revenues and government expenditures. Findings from both of the tests suggest that there is no long-run stable equilibrium relationship between these two variables. Finally the notion of Granger causality denies any causal relationship between tax revenues and government expenditures from either direction during the period under consideration.
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