The Arthashastra is the title of a handbook for running an empire, written by Kautilya (also known as Chanakya, c. BCE) an Indian. Arthashastra, the treatise on Economic Administration was written by Kautilya in the 4th century before Christ. It consists of 15 chapter, Shlokas and INTRODUCTION PURUSHARTAS MEANING OF ARTHA MEANING OF ARTHASHASTRA KAUTILYA ROLE OF ARTHASHASTRA IN.

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Wednesday, January 6, Kautilya’s Arthashastra. Kautilya, also known as Chanakya, is India’s most illustrious political economist of all time. He regarded economic activity as the driving force behind the functioning of any political dispensation. In fact, he went to the extent of saying that revenue should take priority over the army because sustaining the army was possible out of a well-managed revenue system. Kautilya advocated limiting the taxation power of the State, having low rates of taxation, maintaining a gradual increase in taxation and most importantly devising a tax structure that ensured compliance.

The Arthashastra – A Treatise on Statecraft and Military Strategy

He strongly encouraged foreign trade, basing it on the premise that for a successful trade contract to be established, it had to be beneficial to all. He emphasised State control and investment in land, water and mining. Kautilya was a true statesman who bridged the gap between experience and vision. For Kautilya, good governance was paramount. He suggested built-in checks and balances in systems and procedures for the containment of kautklya.

Many postulates of Kautilya’s philosophy of political economy are applicable to contemporary times. Kautilya belonged to the Magadh State, which corresponds to present day South Bihar. Magadh was then the biggest state in India.

Kautilya studied at one of the world’s oldest universities, Takshasila University. He joined Chandragupta Maurya’s empire, after a brief stint with the previous Nanda Dynasty. He served as the Mahaamatya, in the Mauryan empire, a post similar to the present day Prime Minister and, thus, possessed rich experience in political administraion and defence matters. Eventually, Kautilya became an intelligent scholar, fearless thinker, capable secretary, and astute politician.

Vishnugupt’s better known as Kautilya, or Chanakya c. It was written by Kautilya around BC. When literally translated, it means ‘Scripture of Wealth’. Kautilya was credited with bringing down the Nanda Dynasty and influencing the defeat of Alexander in India when the warrior was on his way to conquer the world.

As a political thinker, he was the first to visualise the concept of a ‘nation’ for the first time in human history. During his time, India was spilt into various kingdoms. He brought all of them together under one ‘Central Governance’, thus creating summady nation called ‘Aryavartha’, which later became India. Kautilya’s Arthashastra is an important source of knowledge on polity, arghashastra and administration. However, this important document had been forgotten for centuries.

Thanks to Syamasastri, who first interpreted Kautilya’s economic and political thoughts in a book published in English inwe had insights into the writings of that brilliant mind. Though the general impression is that Kautilya had not written much about economics, the fact is that Kautilya by taking a holistic and integrated approach to governance, had provided a new dimension to the field of economics, which unfortunately has remained neglected all this time.

Economics works well with resource management, efficient administration, a fair judicial system, knowledgeable people with integrity, capable of taking up dummary positions. Kautilya’s philosophy is based on the principles of “sam, dam, dand, bhed” persuasion, temptation, punishment, and division as various, different, and sequential means to achieve an end. Governance – Role Of Ethics.


Kautilya used the word ‘dharma’ which in general, means ‘duty’ and righteousness in personal and social conduct. He described the basic ethical dharmic values as, “Duties common to all – ahimsa abstaining sumjary injury to all living creatures ; satyam truthfulness ; cleanliness; freedom from malice; compassion and tolerance. Five different kinds of interest were distinguished by Kautilya: He recommended that the aggregate wage bill of the State should not exceed one-fourth of its revenue.

Prevention of Unfair Trade Practices. Kautilya’s artthashastra, when seen in totality, represent a very pro-merchant and artisan stance, with the State playing the role of facilitator and protector of commercial interests. The Arthashastra equates political governance with economic governance.

The end is economic governance while political governance is the means. But as economic objectives are not realised in the absence of political ones, then political governance becomes an end and economic governance the means.

Political power and material wealth according to Kautilya are the means and ends of governance. And good governance – political or economic – depends upon justifying the ends and means as the socio, economic and political conditions.

The three constituents of power are: Principles of Economic Administration. The cardinal principle of economic administration was laid down in Kautilya’s Arthshastra in the following words – ” The root of wealth is economic activity and lack of it brings material distress.

In the summxry of fruitful economic activity, both current prosperity and future growth are in danger of destruction. The King shall populate the countryside by creating new villages on virgin lands or reviving abandoned village sites. Kautilya’s discussion of taxation has several underlying principles – the taxing power of the state should be limited, tax should not be felt to be heavy or excessive, tax hikes should be introduced gradually, tax should be levied in the proper place, time and form, and tax level should be equitable and reasonable.

Ideally, the government should collect taxes like a honeybee that sucks just the right amount of honey from the flower so that both can survive. Kautilya’s scheme of taxation arthashastta the elements of sacrifice by the taxpayer, direct benefit to the taxpayers, redistribution of income the state took care of the poorand tax incentives for desired investments.

Winning over Seducible and Non-Seducible parties in enemy territory. Many of Kautilya’s teachings and policies were influenced by the Vedas, which tell us that a human being is made up of mind, body, and intellect brain.

Of these, the body acts either at the command of the mind or at the insistence of mautilya intellect. Intellect is defined as the capacity to control the mind and this comes from study and reflection. The mind is a collection of our feelings, emotions, thoughts etc.

While intellect rationalises, the mind dictates the emotion. Further, the mind is insatiable, it wanders perhaps even faster than the speed of lightand it gets attached.


All arthashaatra things make one dependent on the world. A person feels stress when his mind rules over his intellect. This is the state of unfulfilled desires. Whereas when intellect rules over the mind, the desires become aims and ambitions.

Arthashastra – Wikisource, the free online library

Unfulfilled desires could lead one to anger the mind experiences this as an obstruction to what one desires ; greed when the craving or the desire becomes very strong ; this leads to arrogance, which with the passage of time becomes envy. Envy leads to fear losing what one has. The fourth state that the Vedas talk about is Moha delusion ; but Kautilya lays stress on pride in a man that relates to arrogance arthashwstra the fourth seducible element. Kautilya’s Arthashastra identified the significance of training and learning.


arthzshastra It clearly stated that training imparted discipline. Thus, the lessons of discipline could be imparted to those whose intellect had the desire to learn, capacity to listen attentively, power to grasp what was taught, to retain it in memory, discriminate between the important and the unimportant, draw inferences, deliberate and imbibe the truth and not to others. From hearing sruti ensues knowledge; from knowledge, application yoga is possible; and from application, self-possession atmavatta is possible.

This is what is meant by efficiency of learning vidhyasamarthyam. Kautilya stated that investment in human capital especially in higher education would have a greater impact on the growth and development of the economy. Good governance in Kautilya’s literature is aimed at fulfilling the welfare of the people. Whatever pleases him personally, he shall not consider as good, but whatever makes arthaxhastra subjects happy, he shall consider good.

The jargon related to Human Resource Management was not prevalent then, but its essence was widely practised in Kautilya’s times. He should not violate the course of righteousness and wealth. Thus, he shall not only maintain his servants, but also arthasyastra their subsistence and wages in consideration of their learning and work.

Kautilya said that good arthazhastra and akutilya go hand in hand. According to him, there is stability if rulers are responsive, responsible, accountable, removable, and recallable, otherwise there would be instability.

A ruler who administers justice on the basis of four principles: In day time, the crow kills the owl. At night the owl kills the crow The time of fight is important.

In the fight between the dog and the pig, the ultimate victory is that of the pariah who gets the meat to eat. A dog on land drags a crocodile. A crocodile in water drags a dog the place of fight is important. When there is a conflict between established tradition and ethical principles, or between evidence and what is right according to ethical principles the case shall be decided on the basis of ethical principles.

Where scriptural laws conflict with what is righteous and just, there justice shall be the valid criterion, the written text loses its relevance. Three principal vocations are recognised as providing men with the means of livelihood namely, krsi agriculturepasupalya cattle rearing and vanijya trade.

The three together constitute varita derived vritti,-livelihood. Where rain, free from wind and unmingled with sunshine, falls so as to render turns of ploughing possible, there the reaping of good harvest is certain.

With respect to taxes on agriculture, avoid extremes of either complete absence of taxes or exorbitant taxation. Time opportunity approaches a man desirous of it only once. And will not come a second time when he wants to do his work. Posted by Anuja Misra at 7: Newer Post Older Post Home.