A Look at Kautilya’s Arthashastra From the Lens of India 2021

Author: Himanshu Ranjan


Kautilya, Vishnugupta, or Chanakya – by whatever name you may call him. He is one of the most prominent figures of India in the fourth century BCE. He is best known for toppling Dhana Nanda, the last ruler of the Nanda dynasty. A popular narrative suggests that when Alexander invaded India in 326 BCE, Kautilya had sought the help of Dhana Nanda, the last ruler of the Nanda dynasty – who rejected his advice and insulted him instead. This led Chanakya to train Chandragupta Maurya, who would then dethrone Dhana Nanda to establish the Mauryan Empire. Doing so would not have been an easy feat. Dhana Nanda’s huge army consisted of about two lakh infantry, thousands of chariots, and war elephants – according to Roman historians. His treasury was also rich.

Chanakya was a scholar at the Takshashila University. Located in the Punjab region of the Indian subcontinent, the university is among the world’s oldest. The esteemed alumni of the university consist of Panini, Jivaka, Charaka, apart from Chanakya, and Chandragupta Maurya. The university is now located in Pakistan, one of the reasons why many Pakistani scholars study Chanakya. The Nanda-Maurya episode also tells how superior knowledge can overpower military might and wealth. 

The goal of this article is to understand ‘Kautilya’s Arthashastra’ in the context of twenty-first-century India. For the same, an English translation of the work by Dr. Rudrapatna Shamasastry is the primary source of reference. This article is not a critique due to the fact that the work is more than two thousand years old. There are several instances of misogyny, casteism, and irrational black magic in the text. However, the focus of this article is to find certain principles that can be applied in the context of twenty-first-century India. The honeybee-fly analogy as described in Chaitanya Charitamrita is my motivation for the same. Also, there are several instances in the text that suggests that women were free to divorce their husbands, free to rent their wombs, widows could remarry, women had some say in the property, nobody was allowed to have sex with a prostitute against her will, and Kautilya advocated that the women should be free to interact with male members of the society. Hence, sati pratha and other such derogatory and cruel practices are of a later origin. 

Both Chanakya and Machiavelli are often compared for the deviation in their approach from the ideal-moral route. They are more concerned with the security of the state. At times, the methodology can lead to the propagation of distrust and enmity, and therefore, the circumstances in which these principles can be applied becomes important.  

There are about 6,000 verses in the work. It is a compendium of all the previous books associated with the subject. The work is divided into fifteen books, each divided into several chapters, with a total of 149 chapters. A tabular representation of the same is given: 

Book IConcerning Discipline20 Chapters
Book IIThe Duties of Government Superintendents36 Chapters
Book IIIConcerning Law20 Chapters
Book IVThe Removal of Thorns 13 Chapters
Book VThe Conduct of Courtiers6 Chapters
Book VIThe Source of Sovereign States 2 Chapters
Book VIIThe End of the Six-Fold Policy 18 Chapters
Book VIIIConcerning Vices and Calamities 5 Chapters
Book IXThe Work of an Invader7 Chapters
Book X Relating to War 6 Chapters
Book XIThe Conduct of Corporations1 Chapter
Book XIIConcerning a Powerful Enemy 5 Chapters
Book XIIIStrategic Means to Capture a Fortress5 Chapters
Book XIVSecret Means4 Chapters
Book XVThe Plan of a Treatise 1 Chapter

Throughout the book Kautilya has subtly presented the principle – ‘Study the different forms and explanations given by your predecessors, teachers, and peers but if necessary differ from them and make your own conclusion’.

Throughout the work, Kautilya has cited different schools of thought – the school of Manu, the school of Brihaspati, the school of Usanas, the school of Parasara. He has also quoted individuals such as Bharadvaja, Visalaksha, Pisuna, Kaunapadanta, Vatavyadhi, son of Bahudanti, Katyayana, Dirgha Charayana, Ghotamukha, Kinjalka, among others. However, after presenting their thoughts, quite often Kautilya gives a differing opinion. He even goes on to refute his teacher’s arguments frequently, evident from the statements – ‘My teacher says “…”. Not so, says Kautilya’. Hence, Kautilya asks us to develop our own thinking mechanism. Wherever necessary, give a differing opinion, and even show no hesitation to differ from one’s own teachers. 

Another principle that Kautilya has subtly presented in the work is: ‘One should have knowledge about the order of importance of different subjects and accordingly prioritize them. The gist of Kautilya’s Arthashastra is the art of prioritization.

For example, Kautilya describes four sciences – Anvikshaki, Trayi, Varta, and Danda-Niti. But then he places great importance on the science of Anvikshaki in comparison to the other three sciences. As he says:

When seen in the light of these sciences, the science of Anvikshaki is most beneficial to the world, keeps the mind steady and firm in weal and woe alike, and bestows excellence of foresight, speech, and action. Light to all kinds of knowledge, easy means to accomplish all kinds of acts and receptacle of all kinds of virtues, is the Science of Anvikshaki ever held to be.” (Book I, Ch. 2, p. 9)

In another instance, Kautilya places a great emphasis on wealth creation. He says: 

Kautilya holds that wealth and wealth alone is important, inasmuch as charity and desire depend upon wealth for their realization.” (Book I, Ch. 7, p.17)

While mentioning the qualities of a writ, Kautilya says: 

The act of mentioning facts in the order of their importance is arrangement.” (Book II, Ch. 10, p. 95) 

For the maintenance of justice, Kautilya prioritizes four legs of law: 

“Sacred law (Dharma), evidence (Vyavahára), history (Charitra), and edicts of kings (Rájasásana) are the four legs of Law. Of these four in order, the latter is superior to the one previously named.” (Book III, Ch. 1 p. 217) 

For repayment of the debt, Kautilya prioritizes the debts as: 

Even in the case of a debtor going abroad, he shall pay his debts in the order in which he borrowed them.” (Book III, Ch. 11, p. 251) 

Kautilya prioritizes internal troubles over external troubles:

“Internal troubles are more serious than external troubles which are like the danger arising from a lurking snake.”  (Book VIII, Ch. 2, p. 471)

He also prioritizes the four kinds of dangers. He says:

“The various kinds of dangers are: that which is of external origin and of internal abetment; that which is of internal origin and of external abetment; that which is of external origin and of external abetment; and that which is of internal origin and of internal abetment.” (Book IX, Ch. 5, p. 506) 

Among the four kinds of dangers, he prioritizes these dangers as: 

internal origin and of internal abetment > external origin and of external abetment > internal origin and of external abetment > external origin and of internal abetment. 

On the qualities that serve the benefits of an invading king, Kautilya says: 

Thus of the three acquirements, viz., enthusiasm, power, and skill for intrigue, he who possesses more of the quality mentioned later than the one mentioned first in the order of enumeration will be successful in over-reaching others.” (Book IX, Ch. 1, p. 491)

On the various kinds of distresses that affect sovereignty, Kautilya prioritizes them in the order:

Distress of the king (Prime Minister) > Distress of the Ministers > Distress of the people > Distress due to bad fortification (defence) > distress due to finance > distress due to an inefficient army > distress of the ally  (Book VIII, Ch. 1, p. 467-70) 

Therefore, Kautilya emphasizes quality leadership led by the Prime Ministers and the Ministers who would prioritize the problems of their own citizens. Then, they need to develop such technological abilities that no one dares to attack the nation. Kautilya emphasizes the need for sound economic growth because doing so would automatically remove the distress of the army in terms of a greater defence budget. At last, having settled these, the nation should offer help to their ally. For Kautilya, the most important element is the leadership abilities of the Prime Ministers and the Ministers. 

Kautilya asks that India should be prepared for an all-out attack or multi-front wars: 

“Of the two things, slight annoyance in the rear, and considerable profit in the front, slight annoyance in the rear is more serious; for traitors, enemies, and wild tribes augment on all sides the slight annoyance which one may have in the rear.” (Book IX, Ch. 3, p. 499)

To get an understanding of what is the meaning of ‘annoyance in the rear’ and ‘profit in the front’, a pictorial representation of Kautilya’s Arthashastra by RP Kangle and LN Rangarajan depicting Kautilya’s rajamandala is given below:

Rajamandala or Circle of States by Kangle and Rangarajan

Thus, the conqueror or vijigishu is supposed to be one’s own nation. The rear enemy termed ‘Parshnigraha’ could be an enemy geographically placed in the rear. However, the terms front and rear seem relative. Therefore, the meaning could be that if the conqueror engages himself with the primary enemy (the one in the front), then the ally of the enemy would take advantage of this and suddenly attack the conqueror in the rear. Thus, the rear would mean a region where the conqueror did not place the army in sufficient numbers or a region of weakness accessible to the ally of the enemy. 

For instance, if India attacks Pakistan (the enemy in the front) and sends its troops to engage with it, then the ally of the enemy (the enemy in the rear), let’s say China would suddenly attack India in the regions where its troops are outnumbered. Similarly, if India attacks China (the enemy in the front) and engages with it then Pakistan (the enemy in the rear) would do the same. Hence, front and rear are relative terms. Kautilya, therefore warns that any considerable profit to engage with an enemy in the front could be a gimmick and one should therefore be prepared for an all-out attack. Also, Kautilya’s principle can be applied outside the immediate neighbours. For example, if India engages with Pakistan then it should make sure that China is first baffled by aakranda, i.e. be contained by Japan or the US. 

However, if India is going to be allied with the superpowers of the world, it should do so with caution. As Kautilya says: 

An ally of superior power should not be relied upon, for prosperity changes the mind. Even with little or no share in the spoils, an ally of superior power may go back, appearing contented; but some time afterward, he may not fail to sit on the lap of the conqueror and carry off twice the amount of share due to him.” (Book VII, Ch. 5, p. 389) 

Another important point that Kautilya highlights are the emphasis on the troubles caused by the enemy’s Circle of States (rajamandala). He points out: 

No, says Kautilya, troubles due to one’s own Circle can be got rid of by arresting or destroying the leaders among the subjective people; or they may be injurious to a part of the country, whereas troubles due to an enemy’s Circle of States cause oppression by inflicting loss and destruction and by burning, devastation, and plunder.” (Book VIII, Ch. 4, p.457)

Hence, it is advisable that in the geopolitical framework one must particularly study the enemy’s Circle of States by keeping themselves updated with the changing scenario and undertaking required actions. 

MadhyamaThe king who occupies a territory close to both the conqueror and his immediate enemy in front and who is capable of helping both the kings, whether united or disunited or of resisting either of them individually is termed a Madhyama (mediatory) king.
UdasinaHe who is situated beyond the territory of any of the above kings and who is very powerful and capable of helping the enemy, the conqueror, and the Madhyama king together or individually, or of resisting any of them individually, is a neutral king (udásína)

Definitions as given in Kautilya’s Arthashastra

Kautilya suggests that a nation should make an effort to increase the circumference of its Circle of States. That would require a collaborative effort with friendly nations. He deliberates:

The conqueror, his friend, and his friend’s friend are the three primary kings constituting a circle of states. As each of these three kings possesses the five elements of sovereignty, such as the minister, the country, the fort, the treasury, and the army, a circle of states consists of eighteen elements. Thus, it needs no commentary to understand that the (three) Circles of States having the enemy (of the conqueror), the Madhyama king, or the neutral king at the centre of each of the three circles, are different from that of the conqueror. Thus there are four primary Circles of States, twelve kings, sixty elements of sovereignty, and seventy-two elements of states.” (Book VI, Ch. 2, p. 367) 

“Throwing the circumference of the Circle of States beyond his friend’s territory, and making the kings of those states as the spokes of that circle, the conqueror shall make himself as the nave of that circle.” (Book VI, Ch. 2, p. 369)

Kautilya also points out the six-fold policy (shadgunya) of the Circle of States: 

While Kautilya holds that as their respective conditions differ, the forms of policy are six.

Of these, agreement with pledges is peace; offensive operation is war; indifference is neutrality; making preparations is marching; seeking the protection of another is alliance, and making peace with one and waging war with another, is termed a double policy (dvaidhíbháva). These are the six forms.” (Book VII, Ch. 1, p. 370) 

Hence, though India should be prepared for a two-front war, whenever it engages in war, it should follow the double policy of dvaidhibhava, which means it should make peace with its other enemies. 

Kautilya also suggests which enemies can be attacked-

Not so, says Kautilya: for though impoverished and greedy, they are loyal to their master and are ready to stand for his cause and to defeat any intrigue against him; for it is in loyalty that all other good qualities have their strength. Hence the conqueror should march against the enemy whose subjects are oppressed.” (Book VII, Ch. 5, p. 386)

Therefore, it is of vital importance that in no part of a nation, the majority of the citizens should feel oppressed. 

It is also worthy to note that the modern version of Kautilya’s rajamandala would have transnationally intertwined factors. 

At another point, Kautilya prioritizes wealth creation over virtue. Hence, in a way, Kautilya supports the use of cryptocurrencies for the creation of wealth. 

“Wealth, virtue, and enjoyment form the aggregate of the three kinds of wealth. Of these, it is better to secure that which is mentioned first than that which is subsequently mentioned in the order of enumeration.

Harm, sin, and grief form the aggregate of the three kinds of harm. Of these, it is better to provide against that which is mentioned first, than that which is subsequently mentioned.

Wealth or harm, virtue or sin, and enjoyment or grief are the aggregates of the three kinds of doubts. Of these, it is better to try that which is mentioned first than that which is mentioned later in the order of enumeration, and which it is certain to shake off.” (Book IX, Ch. 7, p. 518) 

Nevertheless, it doesn’t mean that Kautilya promotes wealth gain through unethical means. He says: 

“As virtue is the basis of wealth and as enjoyment is the end of wealth, success in achieving that kind of wealth which promotes virtue, wealth and enjoyment is termed success in all (sarvárthasiddhi).”  (Book IX, Ch. 7, p. 520) 

Hence, Kautilya would not let the nation’s poor starve by criticizing capitalism or banning avenues for wealth creation. He would suggest opening as many channels of wealth creation as possible. For to save people from falling into the traps of poverty is itself a virtue. However, he goes on to say that virtue is the basis of wealth. Thus, those who are wealthy (have already secured wealth), shall act virtuously as they have a bigger responsibility upon them. 

Kautilya advises that in order to gain wealth, the king and the people must be active.

Hence the king shall ever be active and discharge his duties; the root of wealth is activity and of evil, it’s reverse.” (Book I, Ch. 19, p. 52)

He also advises against condemning fate as a factor for the gain or loss of wealth. 

Wealth will pass away from that childish man who inquires most after the stars; for wealth is the star for wealth; what will the stars do?

Capable men will certainly secure wealth at least after a hundred trials, and wealth is bound by wealth just as elephants are bound by counter-elephants.” (Book IX, Ch. 4, p. 505) 

Next, Kautilya prioritizes the Prime Minister’s security for as long as the head of the state is secure, he/she can be in a position to defend the nation. He says:

“Having secured his own personal safety first from his wives and sons, the king can be in a position to maintain the security of his kingdom against immediate enemies as well as foreign kings.”  (Book I, Ch. 7, p. 44) 

So far India has lost three Prime Ministers due to assassinations. Lal Bahadur Shastri, Indira Gandhi, and Rajiv Gandhi. While Indira Gandhi died due to an internal threat, the other two Prime Ministers died due to external threats. Of these, it is still to be known clearly who was behind the alleged assassination of Lal Bahadur Shastri.

Kautilya had already emphasized:
Hence physicians and experts capable of detecting poison shall ever attend upon the king.” (Book I, Ch. 21, p. 57) 

There is a reason that peacocks live in the PM’s residence: 
Cats, peacocks, mongooses, and spotted deer eat up snakes.” (Book I, Ch. 20, p. 54)

Next, Kautilya goes on to advise the bureaucrats and the government officials that they must prioritize and keep a check on the corrupt activities of their subordinates. He says: 

“Commissioners appointed by the Collector-general shall first check (the proceedings of) Superintendents and their subordinates.” (Book IV, Ch. 9, p. 315)

Regarding the levels of corruption possible in the government machinery, Kautilya gives a practical analogy. He says: 

“Just as fish moving underwater cannot possibly be found out either as drinking or not drinking water, so government servants employed in the government work cannot be found out (while) taking money (for themselves).” (Book II, Ch. 9, p. 94)

He also emphasizes a greater level of transparency by the collectors rather than the treasurer. He says: 

No, says Kautilya, the chamberlain takes to himself what is presented by others to be entered into the treasury whereas the collector makes his own revenue first and then the kings’; or he destroys the kings’ revenue and proceeds as he pleases to seize the property of others.” (Book VIII, Ch. 4, p. 458)

In fact, Kautilya points out that there are forty different ways of misappropriation of funds. He also goes on to list them. 

There are about forty ways of embezzlement” (Book II, Ch. 8, p. 88) 

Forty ways of embezzlement 
What is realised earlier is entered later on. 
What is realised later is entered earlier.
What ought to be realised is not realised.
What is hard to realise is shown as realised.
What is collected is shown as not collected.
What has not been collected is shown as collected. 
What is collected in part is entered as collected in full.
What is collected in full is entered as collected in part. 
What is collected is of one sort, while what is entered is of another sort.
What is realised from one source is shown as realised from another. 
What is payable is not paid. 
What is not payable is paid. 
Not paid in time. 
Paid untimely. 
Small gifts made large gifts.
Large gifts made small gifts.
What is gifted is of one sort while what is entered is of another.
The real donee is one while the person entered (in the register) as done is another.
What has been taken into (the treasury) is removed while what has not been credited to it is shown as credited.
raw materials that are not paid for are entered, while those that are paid for are not entered
An aggregate is scattered in pieces 
scattered items are converted into an aggregate.
commodities of greater value are bartered for those of small value.
what is of smaller value is bartered for one of greater value.
price of commodities enhanced
price of commodities lowered
number of nights increased
number of nights decreased
the year is not in harmony with its months.
The month is not in harmony with its days.
inconsistency in the transactions carried on with personal supervision (samágamavishánah)
misrepresentation of the source of income.
inconsistency in giving charities.
incongruity in representing the work turned out
inconsistency in dealing with fixed items.
misrepresentation of test marks or the standard of fineness (of gold and silver)
misrepresentation of prices of commodities. 
Making use of false weight and measures.
deception in counting articles.
making use of false cubic measures such as bhájan. 

Clearly, the knowledge of these would enable the officials to put corruption in check. 

Kautilya prioritizes to baffle, or increase the problems of the stronger enemy first, in comparison to an assailable enemy. He says: 

“The conqueror should march against the strong enemy under less troubles, for the troubles of the strong enemy, though less, will be augmented when attacked. True, that the worse troubles of the assailable enemy will be still worse when attacked. But when left to himself, the strong enemy under less troubles will endeavour to get rid of his troubles and unite with the assailable enemy or with another enemy in the rear of the conqueror.” (Book VII, Ch.5, p. 385) 

Thus, if India considers both Pakistan and China as its enemy, then it should increase the troubles of China (the stronger enemy) and shall never allow it to get rid of its troubles and let it unite with Pakistan to baffle India. 

Kautilya prioritizes the destruction of the enemy even at a great loss. He refutes his teacher:

“No, says Kautilya, even at considerable loss of men and money, the destruction of an enemy is desirable.”  (Book VII, Ch. VIII, p. 423)

Here, he seems to differ from Sun Tzu (the Chinese strategist and the author of ‘The Art of War’) who had said: 

“The supreme art of war is to subdue the enemy without fighting.”

An explanation for the seemingly unreasonable stance taken by Kautilya could be the fact that the Mauryan Empire at its prime was the USA of the world. The Mauryan Army was the largest standing military force at its prime. Today, India is relatively in a weaker position if we compare it with China and the US. Kautilya’s advice therefore must be taken by taking into consideration the time and global influence of the mighty Mauryan Empire. Also, it was a pre-nuclear weapons world. 

However, Kautilya also warns: 

“Whoever goes to wage war with a superior king will be reduced to the same condition as that of a foot-soldier opposing an elephant.” (Book VII, Ch. 3, p. 377)

Kautilya prioritizes diplomatic supremacy over a nation’s defence power. He suggests that enthusiasm alone without upgrading a nation’s defence and a better diplomatic intrigue would not suffice. It seems more practical as, in a world full of lethal weapons, nations would use other intelligible techniques to overpower others. He says: 

No, says Kautilya, skill for intrigue is better; he who has the eye of knowledge and is acquainted with the science of polity can with little effort make use of his skill for intrigue and can succeed by means of conciliation and other strategic means and by spies and chemical appliances in over-reaching even those kings who are possessed of enthusiasm and power. Thus of the three acquirements, viz., enthusiasm, power, and skill for intrigue, he who possesses more of the quality mentioned later than the one mentioned first in the order of enumeration will be successful in over-reaching others.” (Book IX, Ch. 1, p. 491)

Kautilya warns against taking more debts than necessary. For instance, an article suggests that while Bangladesh has kept a public debt to GDP ratio of about 40 %, both India and Pakistan have about the same public debt to GDP ratio which is close to 90 %. Therefore, Kautilya prioritizes other forms of profits that can be accumulated by exploiting the nation’s resources in a more efficient and scientific manner. He points out: 

“When a profit is easily acquired and secured without the necessity of returning it to others, it is termed ‘receivable’; that which is of the reverse nature is ‘repayable’; whoever goes to receive a repayable profit or is enjoying it gets destruction.” (Book IX, Ch. 4, p. 503)

Kautilya prioritizes the concept of saam-daam-dand-bhedas a means of strategy. He says: 

“Of these means, that which comes first in the order of enumeration is, as stated in connection with “invaders,” easier than the rest. Conciliation is of single quality; gift is two-fold, since conciliation precedes it; dissension is threefold, since conciliation and gift precede it; and conciliatory coercion is fourfold, since conciliation, gift, and dissension precede it.” (Book IX, Ch. 6, p. 512) 

Thus, Kautilya suggests that the application of ‘saam-daam-dand-bhed’ would consist of ten combinations and should be done in that particular order. 

He even goes on to suggest which methods to apply when: 

“Success against friends and enemies is always achieved by complicated means; for strategic means help each other. In the case of suspected ministers of an enemy, the employment of conciliation does not need the use of the other means; in the case of treacherous ministers it is by means of gifts; in the case of combination of states, it is by means of sowing the seeds of dissension; and in the case of the powerful, it is by means of coercion.” (Book IX, Ch. 7. P. 519) 

Kautilya also advises the Prime Minister to bestow rewards and honours upon the deserving citizens: 

“Honours and rewards shall be conferred upon those that are contented, while those that are disaffected shall be brought round by conciliation, by gifts, or by sowing dissension, or by punishment.” (Book I, Ch. 13, p. 33)

Regarding the six varieties of harmful wealth, Kautilya prioritizes them as: 

Wealth productive of wealth > wealth productive of nothing > wealth productive of harm > harm productive of wealth > harm productive of nothing > harm productive of harm. 

To substantiate, he further adds: 

“Destruction of an enemy in the front resulting in the destruction of an enemy in the rear is what is termed ‘wealth productive of wealth.’

Wealth acquired by helping a neutral king with the army is what is called ‘wealth productive of nothing.’

The reduction of the internal strength of an enemy is ‘wealth productive of harm.’

Helping the neighbouring king of an enemy with men and money is ‘harm productive of wealth.’

Withdrawal after encouraging or setting a king of poor resources (against another) is ‘harm productive of nothing.’

Inactivity after causing excitement to a superior king is ‘harm productive of harm.’ ” (Book IX, Ch. 7, p. 515)

Kautilya prioritizes mantrashakti (power of counsel and diplomacy) over prabhavashakti (the might of the army and treasury) and utsahshakti (brave attitude to fight). 

Moving on, Kautilya lays great emphasis on able leadership. Hence, the first book of Arthashastra deals with how to train the King as well as the prince. Thus, the Prime Minister and his Ministers need to be adequately trained on various aspects of governance. Similarly, the political parties should pitch their PM candidates before the election and adequately train them on various aspects of leading a nation. In a democracy, these possible PM candidates can be thought of as princes. 

“The king who is well educated and disciplined in sciences, devoted to good Government of his subjects, and bent on doing good to all people will enjoy the earth unopposed.” (Book I, Ch. 5, p. 15) 

But a wise king, trained in politics, will, though he possesses a small territory, conquer the whole earth with the help of the best-fitted elements of his sovereignty, and will never be defeated.” (Book VI, Ch. 1, p. 365)

Regarding the number of ministers in the council, Kautilya says: 

“But Kautilya holds that it shall consist of as many members as the needs of his dominion require (yathásámarthyam).” (Book I, Ch. 15, p. 39) 

The Prime Minister should test the characters of the members of the council of ministers, but it’s important that the members tested should have no inkling that the Prime Minister is testing their characters. This Kautilya suggests can be done by putting up several allurements of the form of religious, monetary, love, and fear in nature. 

“Of these tried ministers, those whose character has been tested under religious allurements shall be employed in civil and criminal courts (dharmasthaníyakantaka sodhaneshu); those whose purity has been tested under monetary allurements shall be employed in the work of a revenue collector and chamberlain; those who have been tried under love-allurements shall be appointed to superintend the pleasure-grounds (vihára) both external and internal; those who have been tested by allurements under fear shall be appointed to immediate service; and those whose character has been tested under all kinds of allurements shall be employed as prime ministers (mantrinah)”. (Book I, Ch. 10, p. 23) 

It has been already stated that Kautilya considered the science of Anvikshaki as the foremost of all the four sciences. Let’s delve deeper into the reasons behind it. 

Anvikshaki is termed the science of inquiry. Broadly, it consists of Sankhya, Yog, and Lokayat. Thus, Kautilya regarded a spirit of inquiry coupled with an evolutionary understanding that is supported by facts and data to be the rational source of decision making. Karma Yog means an incessant activity without attachment to the results. Kautilya did point out the activity as the root of wealth and if that activity is seen with the lens of worldly philosophy of the Charvakas that focused on materialistic aspects, it would be a holistic and pragmatic approach. Hence, Kautilya’s anvikshaki is an amalgamation of Sankhya, Yog, and Lokayat which means to acquire wealth through an evolutionary and rational decision making process by means of incessant activity that doesn’t ignore the material wealth in search of spiritual wealth. In a way, it accommodates all the four purusharthas, namely dharma, artha, kaam, and moksha

It needs to be also pointed out that the wealth or artha of ‘Arthashastra’, doesn’t only deal with the subject of money. Kautilya’s Arthashastra, therefore, consists of governance, defence, politics, leadership, and much more. Though, they are in many ways linked with the aspect of money. For instance, states with poor governance in India also have more poverty. The nations with a higher GDP have a stronger defence and can carry out a better diplomatic influence than others. In a way, Arthashastra is not just economics, it is a thought system that can enrich different domains. That enrichment of various sorts is what is termed wealth. Anvikshaki then can be thought of as an inquiry into all those aspects, that lead to a gain of wealth, and that ‘wealth’ has a much broader connotation as a science of enrichment. 

Kautilya was a believer in reason rather than blindly following texts. He says: 

But whenever sacred law (sástra) is conflict with rational law (Dharmanyáya=kings’ law), then reason shall be held authoritative; for there the original text (on which the sacred law has been based) is not available.” (Book III, Ch. 1, p. 218)

Kautilya places great emphasis on dandaniti, an aspect on which good governance is based. He says: 

That sceptre on which the well-being and progress of the sciences of Anvikshaki, the triple Vedas, and Varta depend is known as Danda (punishment). That which treats of Danda is the law of punishment or science of government (dandaniti).” (Book I, Ch. 5, p. 12) 

It was only when India lost this sceptre that our glorious universities were burnt down by invaders. It is therefore rightly said, good governance and defence are important aspects for the progress of Anvikshaki. If that sceptre is lost, as history tells us, the fall of a nation is guaranteed. 

At this point, it becomes self-evident that India needs to spend more on research and development, strengthen its universities as places where the science of enrichment is taught and nurtured, and that would require a higher budgetary allocation for research and development. 

Kautilya points out without good governance the weak populace will suffer greatly at the hands of the powerful elites. He says: 

But when the law of punishment is kept in abeyance, it gives rise to such disorder as is implied in the proverb of fishes (matsyanyayamudbhavayati); for in the absence of a magistrate (dandadharabhave), the strong will swallow the weak; but under his protection, the weak resist the strong.” (Book I, Ch. 4, p. 13)

Kautilya’s Arthashastra has numerous examples where the citizens are required to pay fines for their mistakes. It could be a mechanism through which a certain civic sense can be ensured. 

Whoever throws dirt in the street shall be punished with a fine of 1/8th of a pana; whoever causes mire or water to collect in the street shall be fined 1⁄4th of a pana; whoever commits the above offences in the king’s road (rájamárga) shall be punished with double the above fines.” (Book II, Ch. 36, p. 209) 

Regarding the amount of fine levied, Kautilya says: 

“‘No’, says Kautilya; for whoever imposes severe punishment becomes repulsive to the people; while he who awards mild punishment becomes contemptible. But whoever imposes punishment as deserved becomes respectable. For punishment (danda) when awarded with due consideration, makes the people devoted to righteousness and to works productive of wealth and enjoyment.”  (Book I, Ch. 4, p. 12)

Thus, levying fines as deserved could be a better means to introduce civic sense in the citizens. If fines are as deserved, then several small offences can be got rid of if implemented properly by the officials on the ground. It will also swell the treasury. 

Kautilya seems against measures that deplete the treasury. He says: 

“The king shall bestow on cultivators only such favour and remission (anugrahaparihárau) as will tend to swell the treasury, and shall avoid such as will deplete it.” (Book II, Ch. 1, p. 61) 

It is however to be noted that he is not at all against remissions or subsidies. If bestowing subsidies could lead to other positive externalities that could ultimately swell the treasury indirectly, that would work fine. For economics is general equilibrium, as Harvard professor turned politician Subramanian Swamy frequently points out. In his recently published book ‘RESET: Regaining India’s Economic Legacy’, Swamy writes about the structure of Economic Policy in Integral Humanism. He says: 

“The new economic policy is structured in a five-dimensional framework and may be thus defined by: (i) Objectives (ii) Priorities (iii) Strategies (iv) Resource Mobilization Measures, and (v) Institutional Architecture.” (Appendix: Towards a new ideology of integral humanism, p. 175)   

Thus, the fact that Kautilya’s Arthashastra prioritizes so many parameters over others – needs to be studied. The budgetary allocation to various ministries should be done on the basis of presentations and proposals sent by the various ministries and departments wherein they should highlight the aspects of why their work has a higher priority than others. That would promote a decentralised collection of ideas from the bottom to the top. That would require deploying the best leaders and performers to the finance ministry. As Kautilya says: 

“ALL undertakings depend upon finance. Hence foremost attention shall be paid to the treasury.” (Book II, Ch. 8, p. 87) 

Regarding diplomatic negotiation, Kautilya says: 

“Negotiation is of five kinds:—

“Praising the qualities (of an enemy), narrating the mutual relationship, pointing out mutual benefit, showing vast future prospects, and identity of interests.” (Book II, Ch. 10. p. 99)

On an important subject – whether a commodity should be centralized or decentralized, Kautilya says: 

“There shall be no restriction to the time of sale of those commodities for which there is frequent demand; nor shall they be subject to the evils of centralisation (sankuladosha).” (Book II, Ch. 16, p. 137)

Hence, commodities that are in frequent demand or are perishable need not be centralized. 

That merchandise which is widely distributed shall be centralised and its price enhanced. When the enhanced rate becomes popular, another rate shall be declared.” (Book II, Ch. 16, p. 136) 

A Hindi version of Kautilya’s Arthashastra suggests that if there is an abundant produce, that commodity should be centralized and widely distributed for better profit realization. Once the profit is realized, prices may be lowered. 

Kautilya even decides on the aspect of centralization on the basis whether the product is imported or not. 

“That merchandise of the king which is of local manufacture shall be centralised; imported merchandise shall be distributed in several markets for sale. Both kinds of merchandise shall be favourably sold to the people.” (Book II, Ch. 16, p. 136) 

This suggests that centralised or decentralised sale of products depend on various factors such as their origin, longevity, abundance, demand, and prices. Recently, the government had to revert back to a centralised procurement of vaccines. Given that many vaccines are imported, need proper temperature for longevity, are less abundant, and the demand for them is high, with variations in prices – these are a set of variables that suggest both a centralised and decentralised framework. Hence, in such situations what works better is better. Often, in realistic situations there are multiple variables that are contradictorily affecting the outcome. Again, in such cases weightage and priorities to each variable matters. 

Kautilya advocates uniformity in tax laws to make them simple. He also advocates remission of taxes as well as punishing those extracting higher taxes. He says: 

“The rules concerning debts shall also apply to deposits.” (Book III, Ch. 12, p. 255) 

“The nature of the transactions between creditors and debtors, on which the welfare of the kingdom depends, shall always be scrutinised.” (Book III, Ch. 11, p. 250) 

In the case of construction of new works, such as tanks, lakes, etc., taxes (on the lands below such tanks) shall be remitted for five years (panchavárshikah parihárah). For repairing neglected or ruined works of similar nature, taxes shall be remitted for four years. For improving or extending water-works, taxes shall be remitted for three years. In the case of acquiring such newly started works by mortgage or purchase, taxes on the lands below such works shall be remitted for two years. If uncultivated tracts are acquired (for cultivation) by mortgage, purchase or in any other way, remission of taxes shall be for two years.” (Book III, Ch. 9, p. 244) 

An interest of a pana and a quarter per month per cent is just. Five panas per month per cent is commercial interest (vyávaháriki). Ten panas per month per cent prevails among forests. Twenty panas per month per cent prevails among sea-traders (sámudránám). Persons exceeding, or causing to exceed the above rate of interest shall be punished with the first amercement; and hearers of such transactions shall each pay half of the above fine.” (Book III, Ch. 11, p. 250) 

The above statements of Kautilya suggest that he wants the government to remit the taxes for works that lead to the welfare of the nation. Kautilya advocates interest rates that are just and the implementation of uniform law and rules for simplicity. Therefore, Kautilya would have welcomed the step of the government in which it consolidated 44 labour laws into just four codes. 

Regarding, certain actions of the government that leads to mass protests as in the case of CAA, NRC, farm laws, Kautilya advises: 

“‘But it is,’ says Kautilya, ‘unrighteous to do an act which excites popular fury; nor is it an accepted rule’.”  (Book V, Ch. 6, p. 359) 

Kautilya prioritizes several other parameters in different contexts and rates one better than the other:

a temporary friend of submissive nature is bettera friend of long-standing, but unsubmissive nature
a small friend easy to be roused is bettera big friend, difficult to be roused
an unsubmissive standing army is betterscattered troops
a friend possessing immense gold is bettera friend of vast population
Friend possessing vast territory
a friend possessing gold
a distant large gain
an immediate small gain
the acquisition of sterile land near to a temporary enemythe acquisition of a rich land close to a constant enemy
A small piece of land, not far, is betteran extensive piece of land, very far
Land which can be maintained by itself
Land which requires external armed force to maintain?
acquisition of land from a stupid kingacquisition of land from a wise king
A limited tract of land with water is far bettera vast plain
land with scattered peopleLand with a corporation of people
A big mine productive of commodities of inferior valueA small mine of valuable yield
a blind kinga king erring against the science

Comparisons as held in the view of Kautilya

For Kautilya, the happiness of the citizens is paramount. The nations such as Bhutan already give more importance to Gross National Happiness. He says: 

In the happiness of his subjects lies his happiness; in their welfare his welfare; whatever pleases himself he shall not consider as good, but whatever pleases his subjects he shall consider as good.”  (Book I, Ch. 19, p. 52) 

To conclude, Kautilya’s Arthashastra is not just the study of economics. It is based on Anvikshaki, which is the science of enrichment of wealth. Wealth in Arthashastra has a broader connotation and deals with many other subjects such as defence, foreign policy, leadership abilities, influence through the circle of states, even calamities, among many others, and is not just related to finance. There are several measures given in Arthashastra that can help a nation to enrich itself. The gist of Kautilya’s Arthashastra is the understanding of the priorities of different parameters. However, many measures would better suit the mighty Mauryan empire, and therefore the development of a new Arthashastra for India in 2021 is required, keeping the basic principles the same but the different circumstances in hand. It is also essential to get rid of any nationalistic bias and treat Kautilya as a learned scholar from whose views one can differ as Kautilya himself held differing opinions from his predecessors. 


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