Relevance of Kautilya Arthashastra in Today's World

Volume 6, Issue 9, September – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
Relevance of Kautilya Arthashastra in Today’s World

Samiksha Rajesh Dixit
TYBA, Department of Economics
Fergusson College, Pune, India
Abstract:- This paper aims to highlight the relevance of takes over him. Book 13 deals with the conquering of
Arthashastra and his economic principles in today’s kingdoms, forts and states which consists of five chapters.
economic world. The significance of the study in the field Book 14 consists of 4 chapters and deals with eerie and occult
of economics by Chanakya, the ancient Indian scholar practices. Finally, book 15 consists of organizing a scientific
and administrator of the Maurya dynasty, dated roughly treatise.
between the 4th century BCE and the 3rd century BCE is
noteworthy. Chanakya, also known as Kautilya, wrote an Kautilya Arthashastra’s ideology is based on the theory
important work on economics – Kautilya Arthashastra, of, ‘sam, dam, danda, bhed’, to achieve a certain goal or aim.
the science of wealth, which contains different micro- Many academicians and economists believe that his teachings
aspects of governing such as administration, statecraft and guidelines are ideal for India’s current economic
and military strategy. The Arthashastra was originally problems. The whole treatise is based on relying on dharma
written for Chandragupta Maurya, but today, it is the (to do one’s duties rightfully) and to create a stable structure
most reputed ancient text on economics. He was an for the steady and sustained growth of the nation. He believed
ethical, intellectual, progressive, and far-sighted that without government, the nation will go down the drain.
independent individual who believed in building a Here he implies, that the government should always act for
systematic organizational structure for the peace and the benefit of the people. Kautilya, thus, is the root of Indian
prosperity of his people. Chandragupta Maurya’s era was economics.
stated as ‘The Initiation of Golden Age of India’, with
Chanakya as his advisor. Arthashastra promotes Ethical behaviour is the top-most priority in
yogakshema i.e karma-yoga (dedication towards work), Chanakya’s Arthashastra. The right ethics and proper conduct
dhyana-yoga (contemplation and meditation) and bhakti- can help a nation maintain the law and order and create
yoga (devotion towards the supreme) for the betterment of wealth which in turn will benefit the nation economically.
humanity. Kautilya regarded natural resources and livestock to be of
utmost importance for any economy. He believed that proper
Keywords:- Chanakya, Kautilya Arthashastra, Economics, management of these resources could help in the betterment
Administration. of economic condition of the nation. He stood by the fact that,
‘humans are a part of nature’ and the growth and progress
I. INTRODUCTION will take place when there is proper management and
optimum utilization of natural resources. In Chanakya’s
The Arthashastra is an ancient Indian text on statecraft, times, trade and commerce were flourishing and he had fixed
administration policy and economics. The treatise together the prices and trade regulations according to the demand and
contains 15 books, 150 chapters, 180 topics and provides a supply of the commodities. Taxes were applicable on income
detailed analysis of administration and a thorough knowledge based on one’s ability to pay. Taxes were imposed on land,
of practical problems a government can face, also mentioning trade and industries. CSR was also a key factor in his
the ways of tackling them. Book 1, comprises of 21 chapters administration. During his times, when Kautilya acted as the
consisting of the training of officials and soldiers. Book 2 is advisor of King Chandragupta Maurya, every responsibility
made of 36 chapters speaking about the job of was handed to a chief superintendent who had to protect the
superintendents. Book 3 is on justice, punishment and subjects under his jurisdiction and make sure everything was
rewards. Book 4 covers the topics related to subduing the working smoothly. Time management was also a very
crime rates and maintaining control over traders and important factor in the Arthashastra and was equally assigned
merchants. Book 5 consists mainly of the division of salary of for each task. Commensuration is a very important law
officials, labours and workers. Book 6 is made up of two created by Chanakya; every offence had a certain degree of
chapters that consist of theory about foreign policy and the punishment according to its intensity. He also states in the
integral elements of state policy. Book 7 consists of eighteen book that, women should be allowed to work and there
chapters based on the six-fold strategy, that is, the usage of should be no gender-based discrimination whatsoever. There
foreign policy in various conditions that could likely arise in were rules and regulations for every act performed by an
some situations. Book 8 covers the subject of calamities and individual to help him/her lead a peaceful and prosperous life.
it consists of 5 chapters. Book 9 contains 7 chapters on how
to prepare for the battle. Book 10 speaks about the war tactics
and strategies. Book 11 has one chapter explaining how one
should handle the confederacy in the state. Book 12 assesses
the weaker king and what happens when the stronger one
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ISSN No:-2456-2165
II. LITERATURE REVIEW IV. RELEVANCE OF CHANAKYA NEETI IN
CURRENT PROBLEMS OF THE WORLD:
Kautilya was a shrewd businessman and had all the
abilities to run a state. He developed many economic policies The Arthashastra is a framework to benefit the top
and a scientific treatise about administration and statecraft. management of the nation for a peaceful and prosperous
His approach towards economics was holistic yet logical to administration. Kautilya lived in an era when monarchy was
bring prosperity to his kingdom. He is the originator of many widespread. Thus, his writing reflects some of the
ideologies and concepts that have re-emerged during the monarchical ideologies from the past. Nevertheless,
recent times. Optimum utilization of resources and wealth Chanakya defines, “Economics is the most important aspect
creation were his main objectives. He was of the view that a of development as it provides the basis for human existence
king is no one without his subjects. He established good and survival”. Kautilya believed that, the king has no
governance in his state which led to one of the most powerful individuality of his own and should work in the interest of his
kingdoms India has ever seen. Dr. Hrishikesh Vinod and Prof. subjects. His happiness lies in the happiness of his subjects.
Balbir Sihag have put in great efforts to bring light to this He has covered a comprehensive range of topics such as
subject. taxation, trade policy, price fixation, market ethics,
international and domestic trade, public finance, revenue
III. KAUTILYA’S ECONOMIC THEORIES AND creation, interest and profit, war and peace, consumer rights,
MODERN ECONOMICS: crime and protection, government expenditure, economic
growth, flexible labour laws etc. He created a path for
Today, India has adopted a western approach for solving economic prosperity through entrepreneurship and achieving
the current problems, but many of the theories that drive it in any situation. Even though there is a difference in eras,
today’s economics were originated by Chanakya. his ideologies are relevant in today’s global environment.
Arthashastra is the first known authentic text on public
Kautilya’s Economic Theories: Kautilya’s economic finance, administration and fiscal laws for the state.
theories were based on ethics. He explained the importance of
ethics and rightful conduct and its benefits to society. The Chanakya was familiar with the theory of demand and
Arthashastra explicitly promotes the goals of both artha supply, the utility of the commodities and its collaborated
(material wellbeing) and dharma (righteous behaviour) as a effect on price determination. He ensured there was no
consistent whole and rejects any divergence from them. hoarding and such other mal-practices happening in the
market so that the prices of commodities did not soar high or
Ethics and rightful conduct were the topmost priority for plunge. He even defined the term ‘future price’, that is, what
Chanakya; he believed that it the way to peace and prosperity. we call in today’s terms as ‘carrying costs’.
He suggested that children should be taught ethical values at
an early age by giving them dharmic lessons from the Vedas Chanakya quotes, “a king must collect taxes like a
(sacred text of Hindu culture). His whole treatise is built on honeybee, enough to sustain but not too much to destroy”.
an ethical foundation and trust in a socially desirable The collection of taxes was well structured and were
perspective. According to him, a society based on morals, collected from all possible sources to provide and protect the
ethics and compassion is productive and less anxiety-prone. state and the king from all the external factors. Sales tax,
Trust plays a critical role and is the most valued possession in income tax, centralised tax and pilgrimage tax collected from
a knowledge-based economy. Sharing and creating all potential sources were spent on social services like
knowledge to incentivize the potential gains from trade is building the roads, setting up educational institutions, funding
built by ethical trust. and building new villages and other activities that would
benefit the kingdom. Land revenue was the most important
Classical Economics: Adam Smith, the father of modern source of tax collected in the state. He insisted on collecting
economics, explains that the best economic benefit can be taxes from farmers who owned arable lands. Kautilya
attained when individuals act in their self-interest. The believed that poverty was a living death and asserted that
Invisible Hand Theory proposes that when consumers act in maintaining law and order was needed for economic
their self-interest, decisions in a free-market economy can prosperity.
make a positive impact on the economy at large. A self-
seeking economy which has adopted a ‘scheming’ approach He stated that productive economic activity and
for trust, treats the trust as a risk and a safeguard against the maximization of utility was the way to a nation’s economic
potential harm that might be caused by the ally’s growth. He believed that the government should watch over
opportunistic view. He set forth the systems of capitalist some of the activities taking place in the state so as to
production, free markets and value. Modern economics maintain the welfare and prosperity of the nation. He
believes that the government should not take participation in highlighted the importance of agriculture in a country and his
business unless to protect the free-market economy. treatise proves to have a solution to many of the problems
faced by India today. Agriculture was the topmost priority as
it was the primary source of revenue creation. Therefore,
creating more opportunities and starting new agriculture
initiatives for a good harvest was important for the state’s
treasury. There were laws fixed regarding the tenure of the

ISSN No:-2456-2165
labourers. Labour wages varied according to the productivity These three sustainable parameters have been observed
of the individual. He designated methods for income fixation. in the governance of countries that have evolved to be the
Water management is one of the most important topics developed countries in today’s times. The king was at the
discussed by Kautilya in his work. There were taxes and apex of the administration of law and justice. Good
irrigation facilities all over the kingdom and improvement of governance can create a positive impact on the economy and
the facilities took place every three to five years. future growth of the nation. Policies related to economic
growth, risk management, self-insurance, monopoly
International trade and possession of territory to acquire regulations, preventive measures to deal with natural
sources of food and raw materials led to wars to protect the calamities, national security are some of those that are very
kingdom and trade routes. Therefore, Kautilya says, the much reliable and relevant in today’s world. Human security,
treasury should be maintained at a comfortable level and have regulations, ethics and dharmic values constitute the overall
a reserve of resources for the war period. Despite this, peace development of the nation. The code of ethics is the foremost
was always in favour above war, as peace can lead to requirement for sustained and steady growth of the country.
productivity and abundance. He anticipated the economic He insisted on educating the children for the sustainable
gains and prosperity of the trading kingdoms and encouraged economic development of the state. Education adds value to
international trade. The institutions and companies that one’s understanding and improves the quality of life. His
generate revenue and made good profits were important for several ideas were later utilized by modern economists to
the development of the society. He knew, higher the risk and advocate the development of the country. Even though there
uncertainty, higher were the profits and interests. He are many parallel concepts and principles in modern
suggested development and maintenance of trade routes to economics, Kautilya’s Arthashastra is studied all over the
ensure smooth trade. Kautilya was the first known person to world for its profound knowledge on administration,
put forward the theory of ‘just price’ meaning, the incentive statecraft and economic philosophy and its relevance in
for business people to keep five per cent to ten per cent of today’s world.
profit in their businesses.
V. CONCLUSION
During the Mauryan era, there was no restriction on the
supply of money. The restriction was decided upon the The Arthashastra is an original treatise explaining all the
availability of the metals- gold and silver, used for minting practical problems and setting guidelines for the management
the coins. He even advocated the theory of banking that kept of the kingdom or state. The work has been recognized as one
the wealth of the traders, artisans and merchants in of the most treasured treatises on statecraft, administration and
safekeeping. He made sure to appoint reliable, loyal and economic philosophy. Even though he did not write a book on
honest people for such money-keeping jobs for the bank to be economics, he has explained his ideas implicitly and has
successful. highlighted many ideologies that are required for managing
the affairs of the state. Even after 2000 years, the relevance of
He structured the rates of interest based on the type of Arthashastra in today’s modern economic world shows,
loans offered. Loans were offered and interests were waived visionaries can positively impact the world at any given point
off based on ability to pay and the type of people taking the in time.
loans. The businessmen dealing with forest products had to
pay double interest on their loans, and the traders who REFERENCES
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staff based on the character reference for the important Investopedia, July 2021.
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He marked upon three parameters that could measure [5]. Hrishikesh D. Vinod, The Handbook of Hindu
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[8]. Shruti R. Panday, Exploring Chanakya’s Relevance in
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Volume 6, Issue 9, September – 2021 International Journal of Innovative Science and Research Technology

Relevance of Kautilya Arthashastra in Today’s World

IJISRT21SEP776 www.ijisrt.com 782

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