Kautilya Arthashastra new revised-mail

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Kautilya’s Arthashastra : 

Kautilya’s 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 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? Time consumes all creatures. It kills everyone. It is awake when people sleep. No one can escape from its’ consuming power. 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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All the desires are impossible to fulfill. The fate can’t grant all of them. Time & efforts fall short. The best alternative is to learn and be content with what one gets. 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.

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” Background of Kautilya

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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 Kautilya’s Arthashastra Book 1 – Shlokas - Totally in Sanskit Book 2 – Line by line translation of Book 1 in English Book 3 – Interpretation of Kautilya’s Arthashstra Subsequently also read: ‘The Way of Financial Management & Economic Governance’ – Kautilya’s Arthashastra Downloads from Internet

Purpose of Presentation : 

Bring out in depth thinking of Kautilya Relevance in contemporary scenario Governance Corporate World Purpose of Presentation

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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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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 King’s Study Daily Time Table spelt out with 8 slots of 1 ½ 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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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 – State’s 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 ¼ 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 – State’s 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 - Local & Imported Prices - Cost plus pricing Profit Margin defined - 5% on Local & - 10% on Imported Income Tax Structure - Local –4% to 16% - Imports – 20% of Profit Authority - Superintendent of Trade 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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Jungles & Mines : Owned by State Metals : Gold/ Silver – Ornaments : Others – Utensils & Weapons Wood : Food Storage / Building mat. Salt Mines : Leased out (Private Sector allowed in Non Core Sector) Mfg. of Textiles : Women allowed to work Army : 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” Other Occupations

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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 7 Expenditure Heads 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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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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Judicial System 4 Tier Judicial System Judges King : Supreme Judge Judge : with jurisdiction of 800 Villages Judge : with jurisdiction of 400 Villages Judge : 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 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 e.g. of Progressive Judicial System

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Kautilya’s Arthashastra does not only mean Economics but ‘Art’ & ‘Science’ of Managing a State

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

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Thank You

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