Kautilyas Arthashastra

Vinayak Narvekar

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Chanakyaniti
Bought a book on Chanakyaniti/ Nitishastra About Philosophy & Ideology a few universally true & all time applicable quotes are

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Chanakyaniti
Time consumes all creatures. It kills everyone. It is awake when people sleep. No one can escape from its consuming power. A wise person must always ponder over How is the time treating me? How many true friends have I made? How is the place I live (work) at? How much do I earn and how do I spend it? Who I am and what am I capable of? Do not be too simple and too straight. Go to the jungle to see how the smooth and straight trees have been cut down mercifully but the crooked ones stand unharmed.
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Chanakyaniti
Do not stay too close to the King. It is dangerous. But do not stay too far off from them. It will gain you no rewards. Just keep hovering around at a safe distance. All the desires are impossible to fulfill. The fate cant grant all of them. Time & efforts fall short. The best alternative is to learn and be content with what one gets.

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Background of Kautilya
Born in 350 BC (2360 years ago)
Scholar Statesman & Philosopher Offered himself to work as Adviser to King Nand of Magadha King Nand insulted him & threw him out of the court Kautilya swore revenge & proclaimed, I will not tie the knot of my hair till the time I do not end the Nand family
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Background of Kautilya
Mentored Chandragupta
With expertise in Politics & Diplomacy, dethroned King Nand & destroyed his Royal family Made Chandragupta Maurya, the King of Magadha Went on to become Prime Minister of Magadha Also worked as Professor at Takshashila University Famous as Chanakya & Vishnugupta, as well.

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References
3 books contain written in 1965 by Dr. R. P Kangle on Kautilyas Arthashastra Book 1 Shlokas - Totally in Sanskit Book 2 Line by line translation of Book 1 in English Book 3 Interpretation of Kautilyas Arthashstra Subsequently also read: The Way of Financial Management & Economic Governance Kautilyas Arthashastra Downloads from Internet
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Purpose of Presentation
Bring out in depth thinking of Kautilya
Relevance in contemporary scenario Governance Corporate World

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What is Arthashastra?
Arthashastra In common parlance means Economics, but the book includes Much More . than just Economics

That too 2360 years ago.

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Disciplines in Arthashastra
Covered today Politics Economics Administration Judiciary

Not Covered Foreign Policy & Diplomacy War Science

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Politics

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Duties of King
King = > Responsible from Yogakshema In the happiness of his subjects lies his happiness, in their welfare, his welfare. Welfare State as a concept e.g. If required by subjects, King should enter into Treaty with even natural enemy for well being of subjects State formed for Economic Governance & People Welfare as end, Political Governance only a mean.

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King Education & Succession

Historically institution of King -> Dynasty Curriculum for Kings Study Daily Time Table spelt out with 8 slots of 1 hours each Succession plan of King Defined Eldest & Deserving & Worthy Son or Adopted Son or In case only unmarried daughter, her adopted son can succeed King only if the daughter commits not to get married
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Office of King
Ministers Qualifications, Application, Selection process incl. Interview with King, Removal process defined

Similar to American (better) method of forming Ministry instead of British & Indian method

There is stability if rulers are responsible, responsive, accountable, removable, recallable, otherwise, there is instability.
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Authorities at helm Servants of State

King Ministers & Executive officer Chief of Army & Chief of Intelligence Agency All @ High offices incl. King = Servant of State=>Salary Salary at High Offices fixed at ~ 48K silver coins p.a. High Salary - To keep away from Corruption e.g. Judges Salary in British Era > Current Judges Salary When liquidity low, payment of Salary in kind.
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Economics

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Economic Philosophy
Wealth & well being of the subjects can be most advanced by a fair & efficient system of taxation, one which will supply the King with tax revenue but will not stifle economic growth Principles of Ideal Tax System: Taxing power of State -> Not Unlimited Taxation Not to be heavy or exclusive/ selective Convenient to pay Easy to Calculate Inexpensive to administer Fair in its burden / based on ability to pay Does not restrict economic growth and dev.
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Nature of Taxes
Indirect Taxes On Manufacturing ~ Excise Import & Export Duties ~ Customs Direct Taxes Income Tax on Individuals & Guilds of Artisans(Corp Tax) Wealth Tax Profession Tax Others Land Revenue & Water Tax Others Toll, fines & Penalties

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Agriculture
Utilisation of Land Land Private Property allowed Administration of State Land If Land is not Private Property States Land State to give it on lease Provision of seeds, cattle & cash by State for farming of State Land Leased Land- If not tilled, Land taken back

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Agriculture
Wages for Labourers for Agriculture Fixed or Variable 1 Silver Coin p m + food for labourer & family or 1/10 of Crop or any other output but No food Revenue from Agriculture - Land Revenue Produce of State Land 1/6 of produce of private land (16.67%) Farmer allowed to sow seeds of his choice but in emergency, state can direct sowing of required seeds
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Agriculture
Irrigation of Land States responsibility Co-operative work for Water Tanks promoted Water Tax 20% to 33.33% of agricultural produce Total Tax incl. Land Revenue= 36.67% < Revenue < 50% Exemptions from Water Tax for: New Water Tank - 100% for 5 years Renovated Water Tank - 100% for 4 years Water Tank, if not used, confiscated State to Lease Pastures to Herdsmen Cattle Census, Revenue based on No. & Type of Cattle
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Trade & Commerce

Types of Sale Prices Profit Margin defined - Local & Imported - Cost plus pricing - 5% on Local & - 10% on Imported - Local 4% to 16% - Imports 20% of Profit - Superintendent of Trade

Income Tax Structure

Authority

Currently, Differential Tax on Domestic & Foreign Co.

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Trade & Commerce

Since revenue mostly in terms of Agri. produce - Sale by State to Private Traders - Sale thru Govt. Servants (like PDS) @ 10% Comm. Contingency like - Authority to intervene & flood, draught, control prices & supplies demand/supply mismatch Weights & Measurement Act in place Fines & Penalties - 1000 Silver Coins for > than defined profit

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Exports & Imports

Equal importance to Import & Export Solicited Imports for Domestically not available goods Cheaper sourcing Better Utilisation of Resources of both kingdom Multiple Rates of Taxes (Range - 4% to 20%) Duties for revenue & not as trade barrier Supported Trade Associations for promotion of Exim Entry permits, passports, OGL system prevailed Price parity between Local & Imports maintained
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Other Occupations
Jungles & Mines Metals Wood Salt Mines Mfg. of Textiles Army : Owned by State : Gold/ Silver Ornaments : Others Utensils & Weapons : Food Storage / Building mat. : Leased out (Private Sector allowed in Non Core Sector) : Women allowed to work : Open for all varnas

Rules for Loans, Int. & : No amnesty, No Loan Waiver Repayment Just as an enemy should be destroyed without a trace, a debt should be paid off till the last penny
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Labour Theory of Value

Wages based on Time Spent Output produced Skill necessary to perform the task (Mark to Market) Labour Policy Wages paid either at end/ middle of cultivation/ Mfg. Wages not contingent upon sale of goods Production not to suffer due to irresponsible acts of workmen

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Public Expenditure
Types of Public Expenditure Daily (Revenue) Expenditure Capital Expenditure Importance of current capital expenditure stressed since otherwise future revenue will suffer Infrastructure Development Dams Canals Forts Moats

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Budgets & Accounts

Office of Budgeting & Accounts responsible for financials Income Heads Expenditure Heads 7 15

(like Schedule VI of Companies Act)

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Budgets & Accounts

Targets for revenue increase & expense reduction (like Managing Margin Project at FES) Govt. needs Fiscal Responsibility & Budget Management Act to control Deficit Restriction of Salary Cost 25% of Revenue only (like 6% of Net Sales for M&M) Pay Commission Rewards make Treasury empty Govt. short of funds for Infrastructure Dev.

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Coins

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Administration

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Crime, Fraud & Consequence Mgt.

40 ways of embezzlement by officers in authority explained Clear Internal Controls/ Hierarchy of command Transfer policy in place to prevent frauds More than 1 officer (at lower levels) to avoid frauds Award for discovering fraud 1/6th of fraud amount (Whistle Blower Policy) Secret Agents to track such officers Penalty up to death or death with torture
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Education
Takshshila, Nalanda Universities imparted education in Agriculture Animal Husbandry Military Politics Economics Commercial & Religion
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Judiciary

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Judicial System
4 Tier Judicial System Judges King Judge Judge Judge

: Supreme Judge : with jurisdiction of 800 Villages : with jurisdiction of 400 Villages : with jurisdiction of 10 Villages

Full Penal Code & Police Manual under various circumstances explained incl. 3rd degree for torturing criminals Treatment in case of Police Excesses
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Judicial System Illustrations

e.g. of Progressive Judicial System Normally complaint will be taken up for hearing by Courts but in case of injustice, court can suo moto take up the case. Person wanting to become a monk needs to take permission from all 3 judges Woman with husband away from her for long time is allowed to re-marry with consent from all 3 judges

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Kautilyas Arthashastra
does not only mean Economics but

Art & Science of Managing a State

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Vision of Kautilyas Knowledge 2360 years ago needs to be acknowledged given its depth & even current relevance !!

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Thank You

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