Kautilya

• Indian economic thought is relatively little known either in India or elsewhere
• The study of ancient Indian economic ideas provides a deeper insight into India's culture, tradition, and inherent national characteristics
• Major sources of information about the economic ideas of Indian writers

  • Vedas
  • Arthasastra
  • the Ramayana and Mahabharata
  • Smritis and Niti Shastras particularly those of Manu and Shukra
• Indian economic thought has certain special features which necessitate a separate study
• The history of Indian economic thought provides rich insights into both economic issues and the workings of Indian thinkers
• Sources of information available for the study of ancient Indian economic thought

  • Vedas
  • the Upanishads
  • the Epics - Ramayana and Mahabharata
  • Smritis and Niti Shastras particularly those of Manu and Shukra
• Kautilya's 'Arthasastra' is considered the most reliable work on ancient Indian economic thought
• Ancient Indian thinkers had no clear conception of economics and their ideas were mixed with politics, ethics, and economics
• Economic thought in modern India was largely influenced by British rule
• The British rule has been considered a major reason for the abject poverty of Indians
• Indian nationalism and widespread poverty of the masses in India influenced the economic thought of modern India
• The economic ideas of Indian writers are mixed with ethics and politics
• Kautilya wrote a book called 'Arthashastra' reflecting Ancient Indian Economic Thought
• Economics was considered as the science of wealth (Artha) in ancient India
• Kautilya regarded economics as a continuous process and his book 'Arthashastra' covers various aspects of society and governance
• Ancient economic thought in India was welfare-oriented with a clear concept of a welfare state
• The functions of the state in ancient India were governed by moral dictates
• Economic life in ancient India was governed by religious ideals and moral sanctions
• Each citizen in ancient India was guaranteed protection against starvation
• An equitable distribution of wealth and food was the objective of the State administration in ancient India
• Wages were determined based on equality and justice in ancient India
• Kautilya was against high rates of interest and believed profits are the rewards of purely entrepreneurial function
• The Vedas spoke about the equitable distribution of wealth in ancient India
• The chief duty of the state in ancient India was to promote the economic welfare
• Kautilya: 'Profits are the rewards of purely entrepreneurial function'
• The Vedas spoke about the equitable distribution of wealth
• Due allowance was given to the differences in caliber, character, and aptitude of the people
• The chief duty of the state was to promote the economic welfare of the people
• Duties of the state according to Kautilya

  Promote trade, agriculture, irrigation, mining, etc. by giving subsidies
• Justice was administered by Panchayats and Guild Courts
• The administration, both economic and political, was fully democratic
• Regulations framed by the State

  • Financial transactions
  • Weights and measures
  • Essential industries
  • Currency and exchange
  • Prevention of adulteration
• According to Shukra


  The State is a trustee to which others are related
• According to Shukra


  The state is a tree of which the King is the root, counsellors are the main branches, commanders are the lesser branches, armies are the blossoms and flowers, people are the fruits, and the land is the seed
• The ancient concept of the State in India was that of a Welfare State
• The Kautilyan state was essentially a welfare state in its ideal and its program of action
• Kautilya intervened, regulated, and participated in socioeconomic activities, controlled private enterprises, standardized weights and measures, and fixed prices
• Kautilya's concept of State was founded on Industrial structure
• Guidelines for the State according to Kautilya

  • The State should undertake industries that help in making the nation self-sufficient and self-reliant
  • Activities related to farming, spinning, weaving, livestock farming, arts, and crafts should be left to individuals with State supervision
  • The State should ensure efficient activities related to production, distribution, and conception according to State rules