Economic Ideas of Kautilya

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Economic ideas of Kautilya (Arthashastra)
Introduction:
Kautilya’s Arthashastra is the chief source of information. Kautilya’s name was Vishnu Gupta. He was a learned Brahmin. He is known by the name of Kautilya because he was an expert in diplomacy and political strategy. He was the chief minister of Chandra Gupta Maurya. He was responsible for getting Chandra Gupta the kingdom of Nand, after destroying its king. Kautilya has given vivid description of the administrative procedures, of the duties of kings, ministers and government officers, in his book. His Arthashastra is based on earlier treaties and is divided into fifteen chapters covering about 430 pages. He has acknowledged his debt to Shukracharya and Brahaspti. He has regarded economic as a continuous process. It covers almost every aspect of the theory and practice of economics. It also deals with the government of town and villages, law courts, rights of women, maintenance of the old and helpless, marriage and divorce, public finance, maintenance of army and navy, diplomacy, agriculture, spinning and weaving and a number of other subjects. His book contains ample ideas on a welfare state. The Ideas of Kautilya:

Economic ideas of Kautilya can be broadly explained under the following topics: Nature and purpose of material wealth
Varta
Agriculture and Animal Husbandry
Dignity of Labour
Trade
Public Finance
Population
Slavery
Welfare State
Social Security
Interest:
Price Control
Socio-Economic Institutions
Town Planning

Nature and Purpose of Material Wealth:
The term Artha (wealth) occupied an important place as one of the Purusharthas, in the system of economic thought during the Vedic Period. The concept of Varta (national economy) as understood by the Vedic seers and sages was the Artha or the material wealth or prosperity was essential for the stability and maintenance of the social structure and organization which provide means and opportunities to every individual for leading a decent life, ensuring adequate self expression, self realization and salvation. The concept of wealth was, thus necessarily correlated with that of want and welfare. During those days, wealth includes, cattle, especially cows and horses. In ancient India, individuals were free to earn and accumulate wealth but only to the extent it was necessary for the satisfaction of one’s wants and those of the members of one’s family.

Varta:
The term Varta which means the science of national economy, has been most commonly used by the ancient thinkers. Kautilya include agriculture, animal husbandry and trade in Varta. Agriculture and Animal Husbandry;

Agriculture and animal husbandry formed important components of Varta. These were regarded as the basic sources of new wealth. Dignity of Labour:
According to the Vedas, a man should lead an active life of hard labour for 100 years. The ancient sages thus appreciated the dignity of labour. Kautilya also recognized the ‘ashram vyavastha’ of the more ancient thinkers. He did not recommend slave labour. Kautilya laid down a code of discipline for labour in which he prescribed penalty for those who refused to work after receiving wages. In certain cases, labourers also were entitled to leave. The worker and the employer may also enter into a written contract.

Trade:
The ancient thinkers approved of trade, whether internal or foreign, only when a surplus, after meeting reasonable domestic or local needs was left over. Broadly speaking, the exchange of commodities of internal trade was considered superfluous. Public Finance:

Taxation was one of the most important sources of revenue of the state. It was known as ‘Raj kar’. The rate of tax was determined in accordance with the dictates of Hindu Religion. According to kautilya, the tax receipts can be divided into three parts: Income earned through taxes on goods produced within a country; Income earned through taxes on good produced in...
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