Public Finance Policy in Kautilya’s Arthashastra

Exploring the Public Finance Policy in Kautilya's Arthashastra and its relevance to the Mauryan period

Abstract

From time immemorial, the great aim of human endeavour has been classified in India as being four Dharma, Artha, Kama and Moksha, roughly translated as moral behavior, wealth, worldly pleasure and salvation.Artha follows Dharma. As used in Arthashastra generally and by Kautilya, the last and greatest master of the science, Artha has a much wider significance than merely wealth.The Arthashastra is essentially a treatise on the art of Government and is, by nature, aphoristic. It seeks to instruct all kings and is meant to be useful at all times. Because it is instructional its basis is the practice of Government. It deals with economics, administration, political ideas, ecology and various other topics.Of the secular literature available on the period of Mauryas, the most important single source is the Arthashastra of Kautilya. The author was the prime minister or advisor to Chandragupta Maurya. Similarities between terms used in the Arthashastra and Asokan edicts would certainly suggest that the Mauryan rulers were acquainted with the book. It importance lies in the fact that it gives a clear methodical analysis of economic and political thought current at that time and more than that, its application to existing conditions. In the administrative measures of Asoka we can see close similarity between the two.Therefore, I begin with the assumption that the Arthashastra reflects the society and economy of the Mauryan period. At the same time one has to accept that though undoubtedly the general policy of the Arthashastra and that of the Mauryan state were very similar and administrative system of the Mauryas was largely inspired by the idea in the Arthashastra. It is however, reasonable to expect that there could be discrepancies.It cannot be ignored that in the age of the Mauryas that a new era ushered in the revenue administration of the country. It further makes the assumption strong that Arthashastra of Kautilya was the guiding force. Kautilya’s major contribution is in the area of public finance. He attached considerable importance to financial management by the State recognizing that the financial strength of the State is critical in normal times as also in times of war, famine and other calamities. This paper seeks to study The Public Finance Policy as reflected in Kautilya’s Arthashastra and also relate it to the Mauryan period.