It was a daunting task before the Nehru-led government to frame a suitable policy of governance for secluded North-Eastern states which were completely separated from the mainstream British India. Due to the historical background as well as the geographical location of the region the government of India has long been tried to integrate the North-Eastern states with mainland India keeping social and cultural institutions of that region unaltered. With the continuous pursuance of protective and proactive role by the government growth scenario of the North-Eastern states has turned out to be satisfactory. Per-capita income has also been growing at a moderate rate and poverty both in absolute and relative term and inequality are declining. However, the worrying factor is that growth is pronounced where government is acting as principal economic actor. In addition, most of the North-Eastern states have demonstrated very poor fiscal condition and solely relying on central assistance. Economic integration sought under a decentralised development model on the failed promise of bringing equitable development across the North-Eastern states has acted as an incentive to raise the demand for special constitutional arrangements, separate state or country based on ethnicity or identity. Finally, occasional use of coercive forces, doling out of funds, and providing autonomy without accountability are the adhoc measures often used by the state to settle the unsettled culturo-social and politicoeconomic issues rooted in the Indian soil based on the notion of the abortive post-colonial Indian nationhood. Resultantly, the grand Indian nation state would certainly suffer from hyper-paranoia and a dreamer for “welfare state” will continue to be interrogated amidst the quagmire of movements based on identity and ethnicity.