Tuesday, 25 November 2014


The economic affairs like other affairs had undergone a process of evolution which resulted   inestimable economic developments and contributions as reflected in the Arthaśāstra of Kautilya one of the great economic thinkers of his times.  The Mauryan state itself took part in a number of economic activities keeping a close watch and control in sectors like, trade, treasury, commerce, agriculture, industries and labour problems etc. The role played by Kautilya in the process of its evolution had been very decisive.  Nevertheless, Early Indian Economic thought is a field still practically untilled, and economic thought in any age only reflects its time and life, it moves with the variation of economic condition. The economic interpretation of our past economy is one of the first fruits of the study of early Indian economic thought that study enabled us to visualized not only the life of our ancestors but it also helped us to recognized and interpret even the purpose of their every day economic activities and affairs. Our knowledge of early economic thought acknowledged the contribution and role of great thinker like Kautilya and obtained for him his due position among the economists of the ancient world.

Since human knowledge can be analyzed and categorized into different sciences, economic science in ancient India was also a result of the some process which deals with the economic phenomena of human life. However, it can be interpreted as the set of theories, doctrines, laws and analyses applied to the study and solution of economic dimension and problem. But economic thought was not a given and fixed set of economic theories or tools and mechanisms of analyses. However, in present day economic scenario economic is a dynamic science, a feature which acquires an account of various reasons. Since human society is a complex phenomenon, a very large number of courses are likely to be at work in most cases. The different scholars could very well differ as to the choice of most relevant courses at work. An economy is a dynamic phenomenon and therefore, economic science is a dynamic one with social change, new economic questions present themselves. And man’s thinking is influenced by his social and physical environment. Since, the economic thought developed along two lines. One hand, within the basic framework of a free economy and its institutional set up, there is always a scope for deeper and intensive investigation which provides a basis for further analyses and theorizing. On the other hand, the very dynamism of an economy provides a basis for further investigation. In a closed or feudal economy, there is not much scope for further investigation. But free economy poses new challenges which economic thinkers have to meet.
Thus it seems that economic science is change oriented. Over successive time intervals, specific sets of economic ideas, theories, doctrines, tools and techniques acquire recognition and acceptance implying thereby that different contexts. We have different system of economic thought. Therefore, the study of the economic thought of Kautilya’s automatically becomes the study of various system of economic thought of Ancient India.
In fact, the economic thought of any civilization or age was the reflex of the life of human of that age or civilization, and the economic life of any people or epoch is again conditioned and programmed very largely by their natural and social environment. The physical background of early Indian economic could hardly have been very different from what it is at present day economic scenario. For example, the dependence of our agriculture on the moon-soon and on the water supply will explain not merely the emphasis laid by the government of the present day as the provision of vast schemes of protective irrigation, but they will show, how, in early India, the provision of similar works utility was justified as much by economic statement ship of Kautilya that rural bodies or villagers should maintain an efficient system of irrigational tank and channels of villages those who damage lakes, embankment and works of irrigation would be penalized”1
The Arthaśāstra a work of substantial importance has been attributed to Kautilya, who played dominating role in the formation of the Mauryan throne that expelled the Macedonian army from India. His role in the field of scholarship is undoubtly laudable, gave detailed analysis of different aspects of early Indian economy. Kautilya and his master work Arthaśāstra are misunderstood. Historians and economists are of the opinions that in early India kings were self centered and their concern was the attainment of personal aggrandizement. But it is simply misconception and the misunderstanding of the scholars. We glean from Arthaśāstra various welfare measures of the state for its subjects, it speaks of kings aims:
“In the happiness of his subject lies the king’s happiness; in their welfare his welfare. He shall not consider as good only that which pleases him but treat as beneficial to him whatever pleases his subject.”1A
But for clear comprehension of Kautilya’s economic thought and their applications to the present economic scenario, for that we have to be aware of the essential characteristics of the core content of the AŚ, such as, agriculture, mining , Industries and forestry, transport, trade and commerce, taxation, wages, allowance, salaries, social security, replenishment of treasury during emergencies, provision for uniform weights and measurement, fixation of percentage of interest, regularization of marketing of commodities etc.2 Kautilya states that if state passes through a deep economic crisis in that situation king should direct the superintendent  of the temples to collect the property, money gold, silvers of the temples and deposit  them in the state treasury.3
                Thus Arthaśāstra gives us idea that if our contemporary government in India adopt this particular Kautilya’s economic thought then our economic crises would be solved.? Kautilya warns:  “A person cannot acquire and maintain wealth, which possessed deep faith in astrology’.  ‘Wealth will pass away from the childish man who constantly consults the stars; for wealth is the star for wealth; what will the stars do”. Men without wealth do not attain their object even it with hundreds of efforts; objects are secured through objects, as elephants are through elephants set to catch them.”4

Thus Kautilya advised the king not to adopt such religious beliefs which put hurdle in the execution of his important plans   he should not hesitate to prescribe for the deposition of the wealth and property of temples in the state treasury during the grave economic emergency.
Though, Early Indian literary traditions refer four branches of knowledge such as, philosophy, religion, economic and polity. The term Vārtā (economics) is referred in AŚ which primarily represents Vṛtti or means of livelihood. It is very clearly depicted in AŚ that Vārtā deals with agriculture, cattle breeding and trade.5 But in modern nomenclature, Vārtā deals with the economics of agriculture, trade, banking and industry, which shows that consumption, distribution, and taxation, forming a modern economic were left out of the scope of Vārtā. It seems that Artha and Artha-Śāstra were quite distinct, 6 the later never deals with the artha in the sense of wealth, which was the subject matter of Vārtā. Ancient literary traditions of India fully recognized the significance of economic science where the Vārtā was considered as essential for the material interest of the people as were the Vedas for their spiritual well-being.7 K.V.R. Aiyangar rightly argued that the “aim of the ancient Indian conception of wealth was to be its material quality, its appropriability, its being the result acquisition, it’s not being quite identical with gold, its consumbility, and its attractiveness due to scarcity.”8
Kautilya was aware of the significance of wealth in the scheme of life for the gaining the ends of human life, and were fully conscious of depressing influence of poverty. Wealth however, was regarded as an end in itself, but as a means to an end. Contrary to common notions, he condemned asceticism and held those seeking to embrace the ascetic order without discharging their duties liable to punishment, 9 both ancient and modern economists, give predominance to rural economies, because agriculture has been the occupation of the pupils throughout ages. Along with cattle breading and doing farming agriculture contributed the most important part of Vārtā, which a king was enjoined to study. The AS speaks that concerted efforts of the state are essential to attain growth with stability in the field of state agricultural production.  It is further stated that for enriching the state treasury, abundance of harvest was considered absolutely essential. Thus the attainment of maximum agricultural production was considered as basic requirement for the welfare of the subject and strengthening the state. Farmers were under an obligation to cultivate their fields. It was punishable offence for a farmer, on a tenant, to neglect or abandon his field of the time of sowing or for the farmer to take away the land from tenant.10 Thus   it seems that development of land was the principal factor in the success of agriculture. The state and the people were enjoined to strive for the prosperity of agriculture. The interests of the peasantry were guarded against distraction or nuisance by banning the intrusion of non-productive classes such as actors, dancers, singers, drummers, buffoons and wandering minstrels into village.”11 The state officers and servants were to live outside the limits of the village apparently to save peasantry from oppression. The AŚ prescribes that army men should not enter into villages except in emergency they were not to oppress peasants or have any dealings with them. It was further depicted that the army was to be used for no other purpose than fighting.12 The economic interest of the farmers were safe guarded by fixing fair prices with a view to lowering agricultural prices.13 A Dasguta rightly argues that “The Mauryan state attached considerable significance to the land holding, settlement and cultivation of land.”14 The AŚ prescribes that the state should bear in mind the settlement of the agricultural region, which had settled before, on which had not been settled before, by bringing in people from foreign lands or by shifting the overflow of population from his own country.15 It is prescribed by Kautilya that in newly settled villages, agricultural operations were carried through after preparing the waste land. He states that such land worth of cultivation should be settled permanently, and economic burden should not be put on peasants, who cultivated waste land, but they should be provided with cattle and seeds to colonies waste land. It was also kept in mind that local markets were to be founded for the sale of agricultural produces and variation of fertility was to be considered while fixing the taxes on peasantry.16 The productivity of piece of land was dependent not merely on its soil, irritability and cultivability, but on its quality of extension, size, situation and accessibility.  The AŚ speaks of certain penalties if somebody abstract agricultural operation. If a person forcibly occupied the land of other, he was to be punished like a thief. Encroachment and destruction of boundaries were considered serious offences, encroachers and guilty were fined 24 pāṇas. If the person encroaches land of other during the time of sowing seeds was to be punished with 12 Pāṇas.17 Kautilya refers certain penalties for harming pastures, which were considered beneficial for the development of agricultural economy. Extremely stringent punishment has been prescribed for setting fire to pastures. Such person if found guilty, was to be thrown into fire.18 It seems that Kautilya prescribed such hard punishment only in order to check completely the deliberate burning of pastures. However, it must be admitted that prescription of such stringent punishment lacked humanitarian touch. The damage of crops of peasant by the cattle, the owner of the cattle was punished by imposing fine double the amount of loss incurred. If an owner of the cattle deliberately left them to stray, he was to be punished with a fine of 24 pāṇas.19
However, we notice certain incentives prescribed by Kautilya to peasants, who played very vital role in agricultural economy by producing food products not only for their family members but also for those who live in urban areas. The land tenures provided incentives to peasant for better participation in agricultural operation. Prepared land was allotted for life time to the peasants. The AŚ reveals that “unprepared lands shall not be taken away from those who are preparing them for cultivation.”20 The peasant should be provided relief by the state during the famine and other calamities, and they should be provided seeds and provision.21 The AŚ further speaks of exemption from the payment of grain tax for year together, when they had contributed to improvement of infrastructure, such as the construction of new tanks, lakes, roads, etc.; repairing neglected or ruined works of similar nature, taxes were remitted for years, for extending or restoring water sources, over-grown with weeds.22 The AŚ prescribes proper arrangement for weight and measures for market places so that peasants could obtain reasonable price of their surplus yield. The peasants were duly helped by the state to utilize maximum irrigation facilities in order to raise production. The AŚ depicted the seasonal agricultural operations extremely essential, it is argued that peasants while engaged in agricultural works would not be arrested,23 the peasants were given loans in forms of cash or kind. The rate of interest on such loans was at one pāṇa and a quarter per hundred i.e. 15% per annum for non-commercial purpose. The rate of interest was higher if related to trade. Those who were engaged in over sea-trade had to pay at the rate of 20% which was highest. The Kautilya’s theory of Interest in the field of agriculture varied between five times and one third of the value of the quantity of pledged.24 The AŚ tells us that interest on grain was not to exceed in season of good harvest, more than half when valued in terms of money. Interest on stocks was one half of the profit and it had to be regularly paid. If it was allowed to accumulate intentionally, the amount payable was to be equal to twice the share or its principal.25 His theory of rate of interest reflects the welfare of the state. He states that: “The welfare of the state depends on the nature of the transactions they should be properly scrutinized’’.26
Thus the payment of interest when due only have been in forced through the power of law or else as Kautilya had so shrewdly observed the welfare of the state would have been disturbed resulting by the economics of disturbance. This implied that public welfare depended largely on the economic dealing between debtors and creditors.
Interestingly, the AŚ has prescribed reasonable relief to debtors, who, due to circumstances over which they had no control, were unable to pay interest over period during which the disability on inability least, he argued that for non-accumulation of debts were minority of the debtors, illness, stay in the teacher’s house (to complete education), engaged in a sacrifice lasting for a considered period and bankrupting or extreme physical infirmity and widow etc.27 Thus Kautilya reminded money lender and state agencies of their social responsibilities by giving certain exemptions and relief’s on the ground of their educational or socio-religious preoccupation which shows that Kautilya concern sociological values and mechanism to cheek the hardship of such categorizes of people living thereon.
The land-system which has been referred in the AŚ time and again is debatable, and has been debated by the scholars since remotest time. The question of land ownership is still undecided, but the difference of opinion among the scholars reflects a difference on how ownership is to be defined, but it can be surmised that the actual position might have changed over the period of time. The AŚ recommended tax free land-grants to Brāhmaṇa priests, state official such as, superintendents, accountants, gōpasSthānikas, veterinary surgeon, physicians, horses trainers, and messengers,28 might be in lieu of cash salary for their services, but they had no right to alienate by sale or mortgage. Thus the Mauryan State indicates the scarcity of coins and certain ingredient of feudal economy?

  The Mauryan state took keen interest for the development of forests, of which it was the sole owner. The AŚ refers that it was the duty of the state to protect, develop, promote and maintain forest, emphasized the need of a forestation, 29 keeping in mind the enormous benefit of forest for mankind. Kautilya laid the duty of the superintendent of forest. “The superintendent of forest shall collect timbers and other products of forest by employing those who guard productive forest, fix adequate fines, which cause any damage to productive forest’’30
. Further prescribed that state should establish product forests, one for each important products, as well as factories for manufacturing goods made from the forest produce to enhance economy of the state.
Nonetheless, the great advance in agriculture in early India and the thorough knowledge of the minute details of agricultural pursuits possessed by ancient economist are seen in Arthaśāstra such as the concept of irrigation by rain, rivers, tanks, reservoirs. The numbers of villages were held jointly and severally liable for keeping, water, channels, and tanks in efficient repair, which ensured project maintenance of irrigational works. Any damage of such works of public utility was to be urgently rectified even from resources of temples. Special facilities were to be given to those who constructed tanks, dams, wells out of piety, so that the state might receive co-operation from individuals in providing irrigation works.31
Land revenue was the main source of income and formed an important ingredient of the Mauryan economic system. The AŚ refers one-sixth of state share as land revenue from the peasants. But during economic emergency, 32 the AŚ prescribe one-third or one-forth as state share. Generally a large portion of the revenue was collected in kind, and the proper keeping and periodical/ renewal of the collected stock was prescribed. Kautilya insists on a full and flowing treasury for the state by appropriating a large portion of the state revenue for the creation of a reserve found or treasury, which was not to be touched except on occasion of a grave calamity.33 Thus policy of Kautilya on economic is quite understandable when one considers the unstable political condition of the time demanding constant preparedness for war because of constant danger from neighbouring state. Thus in early India, when state load was unknown, the only mean available for the state to tide over an economic crisis was the possession of a well-stocked treasury and granary. The AŚ depicted different sources of revenue differently at the different place. Two important categories were body of income and sources of income, each subdivided under seven heads, 34 for irrigated agriculture, a water rate was an even more important source of state revenue than the land tax.
This was payable whenever water for irrigations works was used by the peasants, even if the works belong to the peasant himself.35 There was a graduated schedule of the rate to be changed, depending on the nature of the irrigation works used. If the works were such that the water was set in motion by land, the rate payable was one-fifth of the produce, if set in motion by shoulders, the rate was one-fourth, the latter rate also applied to lift-irrigation, water being lifted from tanks, wells, rivers and lakes while the rate increased to one-third when water was set flowing in channels by a mechanical device.36 In all cases the water rate was addition to the normal land tax of one-sixth. This means that a peasant utilizing mechanical irrigation which used flowing water were liable to pay half of his produce as tax. The AŚ presented certain exemption from water tax for limited period five years for newly built tanks and embankments, four years for ruined or abandoned tanks on renovated embankment, three years for those that one cleared after having become over grown with weeds.37
            Now the question arises whether there were any limits to the state levying exorbitant taxes. Kautilya has considered the point, and he was of the view, that the threat of disaffection among the subject and their possible migration to another state appears to have worked as a deterrent on kings taxing their subject beyond their means. The AŚ prescribes partial or total exemption of taxation, it is noticed that on humanitarian grounds certain classes of people like learned Brāhmaṇas, the dumb, the deaf, the blind, student studying in a Gurukula, and hermits were exempted from paying taxes; infants, those far advances in age, women newly confined or destitute, poor widows, and people otherwise helpless were also tax free.38 Kautilya, prescribed special efforts by the state to enrich the treasury during economic crises, emergencies, besides benevolences, forcible loans and donations, emergency taxes, arbitrary enhancement of normal rates, and fraudulent and forcible collection under several pretexts, which are exhaustively dealt with by Kautilya, who prescribes to the sale of divine images and the entire property of the religious shrines was to be confiscated. The dramatists, singers, dancer, prostitutes had to pay 50% their income as compulsory payments to the state.39 Thus certain undesirable methods to enrich the state treasury during economic crises was the practice of the Mauryan times. But state officials, drawing high amount as salary, were left unaffected during economic crises.
The development of mineral resources was the important state activity and specials attention for the exploitation of mines was paid, and considered mining as the important source of state income. The mining during the Mauryan times was directly connected with various kinds of industrial production. The AŚ speaks of the opulence of industrial production contributed significantly in enriching the treasury. All mines belonged to the Mauryan state were put under the supervision of the superintendent of mines who must be an expert in Sulbaśāstra geology, and dhatuśāstra, metallurgy.40 The digging of new mines and the renewal of old discarded ones was an important duty of the superintendent of mines. Kautilya states that those mines are the best which yield rich ores, are easily accessible and capable of being operated at a small cost. Diamond and gold mines were highly preferred.41 But Kautilya was in favour of a large mine, even if it yields products of small economic value, as the ground that products of small economic value command continuous sale, but the product of high economic value have a limited sale and demand particularly among the common people.42 Although all mines belonged to the state, but not all of them were to be worked directly by the state. The mines with high operating cost were leased out, on for a fixed rent.43 Kautilya prescribes that all salt mines should be leased out for a share on hire.44 Thus credit goes to Kautilya for providing new dimension to the exploitation of mines and setting up separate department for operating mine and manufacture of metals.
However, the early Indian economy was an agricultural economy; the fertile Indo-Gangetic plains provided ample scope for the greeted industrial enterprise in the form of agriculture. But other industrials or agricultural products and natural wealth of the land also developed during Mauryan times. Sugar industry was the most important industry of early India. Kautilya suggests that the lands that are frequently over flown by water for long are suitable for growing sugar cane, and the forming of sugar-cane possessed the risk of facing flood or flood like situation, comparatitively the cost of production of growing sugar cane was much greater. The AŚ prescribes that the special efforts and expenditure were required for transporting and crushing reaped sugar-cane.45 Thus the sugar production was considered most at difficult and worst in agricultural production system.
Another industrial activity of the Mauryan state which was given considerable attention was textiles. The Artisans of the Mauryan state had attained a high degree of proficiency in spinning and weaving fine textiles. The Mauryan economy was partly pastoral and partly agricultural. As such tending of cattle and shearing off goats and sheep hair constituted important occupation, resulting in the weaving of woolen clothes. Textile industries during the Mauryan were snot state monopoly, but Kautilya refers to private production. However, the Mauryan state was expected to engage in production of textile on an extensive scale, and to maintain strict state control and supervision of that part of industry which was in private hand.46 The AŚ refers to the Sūtradhyakśā who was suppose to get yarn spun from wool, bark-fiber cotton, hemp and flax by woman, especially those without support, women from respectable families should be allowed to spin in their homes. The officers in change was directed to look after the manufacture of ropes, thongs and straps, useful for carts, chariots, etc., used in the anmy.47 The AŚ prescribes that those women who do not stir out of their Houses, those whose husbands are gone abroad and those who are cripple or girls may, when obliged to work for subsistence, be provided with work in due courtesy through the medium of maid servant while making construction in a new fort, places were allotted to artisans in a corners of a fort, guild of artisans and cooperation of workmen resided within the fort. It was on the sweet will of the artisans to allow others of their profession to reside in the locality.48 Thus besides giving Protection to the workers and artisans, state also kept a strict watch over their mal-practices and mischief’s. Ratio of raw material and finished goods were fixed. Adulterations in commodities were properly supervised and monetary and corporal punishment was suggested to anti-social workers. 49 We notice plethora of reference to various guilds and corporation in .  Kautilya states that the guilds   of artisans as well as those who carry on any co-operative work shall divide their earning either equally or as agreed upon among themselves, 50 certain artisans working independently with their own capital and in their own work-shop. Whereas the artisans working in guild system, guaranteed the customer against loss, damage, etc., caused by artisans. Even there were master artisans, employing a number of artisans to do work for the customers, and earning a profit, the delay in delivery and failure to carry out the customers instructions were offence punishable by the state. During the Mauryan times guild had became very rich and powerful and some of them maintained troops of their own. The AŚ refers to the danger of provoking these corporations and advocates several methods of  exploiting them in the king’s name.52 The potential danger to the state from the unrestrained power to these guilds seems to underlie the severe regulation restricting their activities. Another important responsibility of the Mauryan state was to arrange for storage of a wide variety of goods. The construction of the stores is described at length. The part of the stores was made up of goods produced by state and enterprise, the rest was received by the state in kind. The store provided a convenient means of creating buffer stocks and preventing a wide fluctuation in rice, the director of the trade being expected to buy when there was a slut and sell when there was scarcity.53
The media of exchange was also an important ingredient of the Mauryan state. Throughout the Mauryan times, money has been an important media of exchange. It has on the one hand relieved the commercial and economic fields from the defects of barter system while on the other guaranteed a great impetus to payments for goods or carrying other kinds of business obligations. The AŚ refers to several types of coins, such as gold, silver and copper coins. The coinage was a state monopoly, and the special official under the Mint Master received bullion from the public to be struck into coins on payment of seignior age changes.54
However, trade was one of the most significant economic activities in Mauryan state and received a large part of its income from trade and was having monopoly over the manufacturing of a large variety of goods. The AŚ tells us that it was made obligatory for traders to get license, while, and foreign traders were required to get passport in addition. Kautilya classified trade into two distant categories – Svabhūmija, indigenously produced or pārabhūmija, produced in foreign lands. Indigenous good belonging to the state were sold in one place, presumably, the capital city, where all state stores were located. Imported goods were to be sold in a number of centers. In both the interests of the customers were to be kept in mind while fixing the selling price. The AŚ prescribes that a large profit must be avoided if it was harmful to the subjects, especially in the case of commodities constantly in demand.55 The AŚ refers two factors to be considered in fixing value of price were (a) the cost of production as determining the supply; and (b) the demand for article as determined by its utility.56 Whole scale price for goods were fixed by the superintendent of commerce, as they passed the custom house. A margin of profit was allowed to retailers. The public, consumers and customers were protected by the state, which employed an army of spies and market inspectors against unauthorized price and fraudulent transactions. Goods had to be sold at fixed market, places, and the dealer had to specify particulars as to quality, quantity, and price, which were scrutinized  and recorded in official book.57 The superintendent of commerce not only prevented or minimized the chances of deceit, or of undue advantage being taken by the seller over the buyer, but also ensuring that the prices were not exorbitant or unconscionable, and that the material, its style, quantity, or measure precisely corresponded to the terms of the bargain.58 Normally  state goods were sold by the state officials but the help of private traders was sought. In that case, traders were required to pay a fee, to make up for the loss of profit which the state would have earned by sale through its officials.59 The involvement of private traders in selling state goods indicates the ingredients of the privatization of trade even during the Mauryan period, which is considered the feature of present day economic trends and ideas.
However, the economic advantages of both inland and foreign trade were duly recognized. The organization of castes and guild led not only to localization of industry, but also to the creation of special local market for the sale of product. The freedom of the market was implied in the rule prohibiting the king from going into the market with his retinue. The existence of grade of middle men, between retail traders and the powerful magnates who were able to create ‘corners’ and to manipulate the market in their own interest was not only implied but provided against.60 The officer in charge of trade was to arrange for the export of state goods to foreign lands. When undertaking such a venture, he was to taken to consideration all relevant factors such as costs of transport, duties prevailing prices in different places and so on to determine the profitable. He could also investigate the possibility of bartering state goods for those from foreign lands.61 The general principle of export- import trade was to ensure profit. Should there be no profit, he should see it there is any advantage in taking out goods or in bringing goods in exchange for goods, and along river routes he should ascertain condition of trade before hand and should proceed to where there is profit, avoiding places where no profit can be had.62 They had to secure new market for the surplus products of the country. Rest houses and store-houses were to be provided for traders, for whose protection proper police escorts were also recommended. River boats and ocean going ship were to be pressed into services. The  prescribes: “the state administration must granted it security against thieves, forest tribes, wild forest folk, etc.; and undertook to make good losses in transit’’.63 The AŚ further prescribes to encourage import, suitable- rebates to foreign traders, if current rate did not leave a proper margin of profit for them.64 To encourage, promote, and facilitate trade, both inland and foreign, state were enjoined to improve and increase the means of communication and transports. Thus Kautilya refers several trading facilities which were afforded to encourage foreign trade. Foreign merchant could sue in Indian court, and were protected from being harassed by suits against them in local courts.
            Kautilya accepted that in spite of all precautions; it was impossible to eradicate corruption from amongst the state employees who participated in financial transaction. He states that: “just as it is not possible not to taste honey or poison placed on the surface of the tongue, even so it is not possible for one dealing with the money of the state not to taste the money in however small a quantity.”65
The AŚ depicted that, “just as fish moving under water cannot possibly be found out either as drinking or not drinking water, so the state employee carrying out state work cannot be found out while taking money for themselves’’.     
 Kautilya prescribes the transfer of state employee from one work to another work or one place to another place, so they could not misappropriate govt. money. 66

 Thus it is very clear that the problem of corruption among the state employee is as old as early Indian state and not the practice of modern time only. It seems to be a universal practice from ancient to present time, which is not accepted fact in our modern administrative system. But AŚ also prescribes certain incentives to those employees who enhance the state revenue instead of eating it up, and loyally devoted to the state services, should be made permanent in state services,67 even AŚ refers forty ways of embezzlement of revenue of the state by its officials. All possible efforts were suggested by Kautilya to minimize the practices of corruption among the government employees.
However, the AŚ prescribes and discusses the principles on which salaries of the various state/government officers and employees should be determined. The amount of salaries paid to different grades of employees during the Mauryan times reflected some basic aspects of an economy. Monthly salary was prescribed by Kautilya in terms of Pāṇa, which were legal tender as well as medium of exchange. A Pāṇa contained silver equal to three-forth of Tola (10 gm).69 The silver content of a Pāṇa in the present time will be approximately of the value of rupee fifty. The salaries were fixed on a cash basis but could be paid in kind or as a mixture of the two; a formula is given for converting a part of salary into a mixture of mostly grain and a little cash. An official could, in lieu of a part of his salary be allotted land to be formed by him for his own benefit but such land could neither be sold nor mortgaged and could be used only as long as he held the office.70 The paying state officers through land grants is the indication of the presence of the ingredients of feudal economy. The principles of salary fixation as depicted in Arthaśāstra as follows:
The total salary bill of the state shall be determined in accordance with the capacity (to pay) of the city and the country sides and shall be (about) one quarter of the revenue of the state.  The salary scales shall be such as to enable the accomplishment of state activities (by attaching the right type of people), shall be adequate for meeting the bodily needs of state servants and shall not be in contradiction to the principle of dharma and Artha. If the (amount of the actual cash in the) Treasury is inadequate salary may be paid (partly) in forest produce, cattle or land, supplemented by a little money.71 However, in the case of the settlement of virgin lands, all salaries shall be paid in cash; no land shall be allotted (as a part of the salary) until the affairs of the (new) village are fully stabilized.72 The AŚ further states that salary of any individual employee, permanent or temporary, shall be fixed in accordance’s with the principles of salary fixations, taking into account each one’s level of knowledge and expertise in the work allotted.73 The AŚ refers to special provision for the honorarium for teachers and learned men as minimum 500 pāṇas and a maximum of 1000 pāṇas (for each occasion).74 Traveling allowances are prescribed for middle grade officers as 10 pāṇas per yojana, upto 10 yojańas – 20 pāṇas per yojańa, between 10 to 100 yojańa, if any government officer dies during his duty. His sons and wives shall be entitled to his salary and food allowances. Minor children and old or sick relatives shall be (suitably) assisted economically.75
Conclusion:  Economic though of Kautilya attracted the attention of scholars all over the world. Probably no early human civilizations practically witnessed the economic system prevailed as envisaged in the Arthaśāstra of Kautilya. But it is also true that AŚ does not discuss wholly impossible utopias; the economic thought was often pedantic, but usually more or less feasible. However, it is not likely that any state conducted its affairs wholly on textbook lines, and the prescriptions of the experts were/are not always put into practice. The so called state controlled economy of the Mauryan kings was confined to the middle Genetic plains, which did not last during the later Mauryan times and post-Mauryan periods, where land seems to have been newly in possession of individual farmers and peasants. The controlled cultivation was replaced by individual cultivation. But we must bear in mind that Kautilya had little interest in ethical issues, unlike the Buddhist. However, Kautilya categories three types of goals such as spiritual goals, material well being and sensual pleasure, but he advocated that material well being alone is supreme, spiritual goals and sensual pleasure depend on material well being. Thus, he states, it is wealth not stars, that leads to achievement of any kind.
B. Belier is of the view that the Mauryan economy was a planned economy and points out that Kautilya economic planning was necessitated by the very circumstances and factors presented in early India occasioned by climate and nature.76 He further argues that there is no trace of such a planned economy in European theories until recent time.77 His extensive work on Kautilya planned economy can be negated from the stand point of modern economics. Kautilya presented virtually as an anticipator of economic planning. This is a serious   proposition and eminently opens to challenge and negation.  Breuer had been trained in Marxist tradition and ideology, and influenced by Russian and Marxist ethos and ideas. Thus it is inevitable that he would want to compare and trace the idea of Russian planned economy model with that of early Indian Economy of the Mauryan times. The economic planning was indeed in one sense such a simple, elementary and human category that almost every individual even of the most primitive times may be said to be an economic planner in so for as he makes provisions for the future. Similarly every state that make a yearly budget is also used to planning out the future ahead.78 In a more limited sense economic planning implies his intervention of the state in the private economy of its citizen, even modern state also control and interfere in the private economy through certain laws. This is almost an eternal as well as a universal fact of economic history from the remotest times. “The regulation of prices, wages, and interest, the prescription as to the kind of food grains to grow, the control of commerce by tolls, excise and customs, the redistribution of national wealth and income by taxation and currency, manipulations, and of course, the promotion of public health VidyasKālas, arts and services etc.; have been the regular features of state activities in the East and the west.79 Breloer used a common place category economic planning without distinguishing its old and new contents. But we must bear in mind that modern economic planning has to be distinguished from the kind of planning visualized in Arthaśāstra. The modern concept of economic planning or for the development, the state prepares a plan which may spread over a certain number of years, lays down priorities in the matter of development, allocates resources in men and capital in accordance with the priorities and watches over the progress of the plan in the various field from year to year, but Arthaśāstra does not prescribed these things.
How for does the picture of economic thought gleans from the Arthaśāstra conform to actual conditions? This is indisputable that some sort of control over economic activities was necessary in the interest of the state revenue. But we cannot state in precision that Kautilya was directly associated with the economic policy of the Mauryan state. As a matter of fact, the economic thought depicted in AŚ might not be the innovation of Kautilya, there might be derived from earlier traditions. The Arthaśāstra of Kautilya prescribed the model of mixed economy, in which private and public sectors played their important role. It prescribed for the adoption of standardized weight and measures for the entire economy. Kautilya was aware of the fact that regularized marketing and provision of cheap credit were basic requirement for the rapid and stable economy. Some of the features of the Kautilya economy are adopted by states of modern world. The state had monopoly in the production of served goods and participated with private entrepreneurs in the exploration of mines. Fixed rate of interest and profit were prescribed. Traders were compelled to use standard weight and measures, the implication of a comprehensive programme of social security measures. Utmost care was taken to promote economy and the welfare of the people which was the main agenda of the Mauryan state. Thus it can be surmised from the analytical survey of Arthaśāstra that some of the Kautilya’s economic thought keep relevance in the present day economic scenario.
The Arthaśāstra of Kautilya emphasized to pay proper attention for a forestation. He advocated the adoption of monoculture of some valuable trees species to enrich the forest reserve of the country. The AŚ prescribed for the proper maintenance of recreational forest. Wildlife protection was given due importance, chief credit and marketing was prescribed in order to accelerate the tempo economic growth. Kautilya suggest the maximum irrigation facility in farming to attain growth with stability, and was in favour of regularized marketing system in the field of agricultural production. Kautilya paid supreme importance to the maintenance of rich treasury, which favourably affected entire activities of the state. In his opinion the augmentation of the treasury depends mainly on abundance of harvest, opulence of industrial production, prosperity of trade and commerce as well as on good economic management. The AŚ prescribed that the dependants of deceased employees of the state, must provided maintenances those economic security measures adopted by the state keep relevance in the present time.
Thus, it can be deduced that the Mauryan state must run a diversified economic activity, efficiently, prudently and profitably. The kings were advised to be ever active in the management of economic because the root of wealth was economic activity inactivity brings material distress. Without any active state economic policy, both current prosperity and future gains are destroyed. Thus state should be active in managing the economy because source of material wealth is economic activity. Without it natural well being is not possible. And kings were advised to maintain a diversified economy, within the limits of the technology available at that time. It is very clearly depicted in AŚ that artha has a much wider significance than merely ‘wealth’. The material well-being of an individual was a part of it. As Arthaśāstra in its concluding part depicted that the source of the livelihood of human being is wealth which is both the territory of the state and its inhabitants who may follow a variety of profession. Thus it is the sacred duty of government of a state/nation to maintain the material well-being of the nation and its people.
1.         R. Shamasastry (ed-&-tr.) Kautilya Arthaśāstra, Mysore, edition, 1929 and 1960-61 (hereafter R. Shamasastry AŠ, pp. 47, 227. R.P. Kan‍gle, The Kautilya Arthaśāstra, 3 Pts. Rep. Delhi, 1986 (hereafter as Kangle AŠ) II.I, IV.10, L.N. Rangarajan, Kautilya the Arthaśāstra, Delhi, 1992. (hereafter as L.N. Rangarajan AŠ).
1A.      R.P. Kangle, AŚ, IV.3, V. 2. 37-38,p.26, R. Shamasastry, AS, p. 38. T. Ganapati Sastri, The Arthaśāstra of Kautilya, Pts. Trivandrum, 1924-25. (hereafter as T. Ganapati Sastri AŚ) Devadatta Sastri, Hindi Tr. Kautilya Arthaśāstra, Allahabad, 1957. (hereafter Devaddutta Sastri, AŠ).
2.         L.N. Rangarajan, AŚ, pp. 14, 16, 81, 89-95, 242-293. R.P. Kangle, II.12, 16, 17, 19, IV. 2, III, 14, V. 2, 3.
3.         R.P. Kangle, AŚ,V. 2.37-38,p.155
4.         R. Shamasastry, AŚ, pp. 378-79, L.N. Rangarajan, , p. 637, R.P. Kangle, IX, 4. 26-27,p.225
5.         R.P. Kangle, AŚ, I.2, 4.
6.         Ibid. I.4, XV.1. Vidyabhaskar Vedratna and Udayveer Sastri, (tr.) Kautilya Arthaśāstra, 1.4, XV.1, (hereafter Vidyabhaskar As).
7.         The Cultural Heritage of India, published by The Ramakrishan Mission, Vol. II, Calcutta, 1962, pp. 655-56 (herafter as CHI).       
8.         K.V.R. Aiyangar, Aspects of Ancient Indian Economic thought Varanasi, 1934, pp. 23-26.
9.         CHI, op.cit. p. 656.
10.       R.P. Kangle, . I.5, III. 10.8.
11.       Ibid. I.1.
12.       Ibid.
13.       Ibid. IV. 2.
14.       Ajit Dasgupta, A History of Economic Thought, London, 1993, p.29. (hereafter as Ajit Dasgupta)
15.       R.P. Kangle, AŚ, II. 1.1.
16.       Ibid. II. 4.3, II. 24, R. Shamasastri, AŚ, pp. 116-117.
17.       R. Shamasastri, AŚ, pp. 192-194, AAIC, op.cit., p.71, R.P. Kangle;. AŚ, II. 10.1, IV. 10.
18.       Ibid. IV. 9.
19.       Ibid., III. 10, K.N. Jha and L.K. Jha, Chanakya the Pioneer Economist, Delhi, 1997, p. 63, (hereafter K.N. Jha & L.K. Jha).
20.       R.P. Kangle, AŚ, II.1
21.       Ibid. IV.3.
22.       L.N. Rangarajan, AŚ, p. 81-82, 265-269. R.P. Kangle, AŚ, III.9.
23.       K.N. Jha S- L.K. Jha, op.cit. p. 56, AŚ,III. 11.
24.       R.P. Kangle, AŚ, XI. 1, 2, 5. Nagarajan, Foundation of Hindu Economic State, Nagpur, 1997, p. 205.
25.       G.C. Chauhan, “The Kautilyan Theory of Rate of Interest: An Ingredient of Welfare State”, in ABORI, LXXXIX, 2008, pp. 35-37.
26.       Vidyabhaskar, AŚ, III. 5, R.N. Saletore, Early Indian Economy, 2nd Ed. Bombay, 1993, p. 668.
27.       R.P. Kangle, AŚ. III. 11.
28.       Ibid. II.1.p.32, G.C. Chauhan, Origin and Growth of Feudalism in Early India, (From the Mauryas to 650 A.D.), Delhi, 2004, p.81
29.       R.P. Kangle, II. 1-2, L.N. Rangarajan, op. cit. PR 44, 27, 83, 88 181, 623.
30.       Ibid. II. 17, 25. P.67
31.       Ibid. II. 1-2, 24, VII, 11, VIII. 4 L.N. Rangarajan, AŚ, op.cit., pp. 78, 237-40.
32.       Ibid. II.6, 15.
33.       CH1op.cit., p. 665.
34.       R.P. Kangle, AŚ, II.6. two categories such as ayasarira (body of income and Ayamakha, Sources of income).
35.       Ajit Dasgupta, op.cit., p.34.
36.       R.P. Kangle,, II.24.
37.       Ibid. II. 9.
38.       R.P. Kangle, AŚ. II, 1. 7-18, III. 9-33.
39.       Ibid. V. 2, L.N. Rangarajan, op.cit., pp. 14-16, 55, 265-269.
40.       Ibid. II. 12.1, II. 12.7.
41.       Ibid. VII.12, Ajit Dasgupta, op.cit., p.30.
42.       Ibid.VII. 12. 14-16.
43.       Ibid. II. 2.22.
44.       Ibid. II 12.28.
45.       Ibid. II. 14-15.
46.       Ibid. II. 23, Ajit Dasgupta, op.cit., p. 32.
47.       Ibid. II. 23.11, 18-19.
48.       Ibid. II 4, 38.
49.       Ibid. II. 14-15.
50.       Ibid. II, 4-6, L.N. Rangarajan, AŚ, op.cit., pp. 95, 181, 252.
51.       Ibid. IV. 1. 5-7.
52.       Ibid. XI. 1.
53.       Ibid. II. 5, 1-6, Ajit Dasgupta, op.cit. p. 33.
54.       Ibid. II. 12-14.
55.       Ibid. II. 16, 4-6.
56.       Ibid.
57.       CHI, op.cit., p. 661.
58.       R.P. Kangle, II. 16, 11, 21, IV. 2. L.N. Rangarajan, op. cit., pp. 16, 77, 91-93, 242-248.
59.       Ibid. II. 16. 8-16.
60.       Ibid. IV. 2.
61.       Ibid. II. 16.
62.       Ibid. II. 16. 16-25. L.N. Rangaranjan, op.cit. pp. 83, 182, 242, 307, 326-348.
63.       Ibid. II. 21, 22, 28, 34, IV. 13.
64.       Ibid. II. 16.
65.       Ibid. II. 9.32.p.48
66.       Ibid. II 9. 33-34.p.47
67.       Ibid. II. 9.36.
68.       Ibid. II. 8.20.
69.       Ibid. V. 3, L.N. Rangarajan, op.cit. pp. 289-293. K.N. Jha-&- L.K. Jha, op.cit., p. 224.
70.       L.N. Rangarajan, op.cit., p. 179, R.P. Kangle, AŚ, II. 2.7.
71.       Kishor Thanawala, “Kautilya’s Arthaśāstra: A Neglected work in the History of Economic Thought”, in B.B. Price, (Ed). Ancient Economic Thought, Vol. I, New York, 1997, pp. 43-57. R.P. Kangle, AŚ, V. 3. 1-2.
72.       Ibid. V. 3.52.
73.       Ibid. V. 4.33.
74.       Ibid. V. 3, 18-21, 28-30.
75.       L.N. Rangarajan, op.cit. pp. 289-292.  R.P. Kangle, the Kautilya Arthaśāstra, Part III, Delhi, Rep. 1986, pp. 208-210.
76.       B.K. Sarkar, “Kautilya, Economic Planning and Climatology”, in Indian Historical Quarterly, Vole, XX, Calcutta, 1935, pp. 329, 356.
77.       B. Breloer quoted by R.P. Kangle in The Kautilya Arthaśāstra, Part II, rep. Delhi, 1986, p. 191.
78.       B.K. Sarkar, Loc. Cit, p. 343.
79.       Ibid.


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