Indian Political Thought: Arthashastra
The historical process of tradition of Indian Politics is primeval and traced back to the period of Vedas. The deliberations regarding politics are found in 'smritis' and 'puranas' by the name 'dandaniti'. References to various political texts are available which studied and discovered the concept of 'dandaniti'. It is possibly Kautilya's Arthashastra which stands out to be systematically scientific and most authoritative explanations of these prehistoric studies. Arthashastra was Transcribed in around 4th century BC by the Prime Minister of The Great Mauryan Empire Kautilya, also called Chanakya or Vishnugupta. Arthashastra is one of the most persuasive and comprehensive treatises in Political Science in the Indian Vedic Civilization. Regarded as essence of ancient Vedic wisdom in politics and economics, Arthashastra has noteworthy significance in modern times with some inquisitive resonance with the thoughts and theories of various philosophers, economists and political scientists around the globe.
The Arthashastra is a primeval Indian discourse on statecraft, economic policy and military strategy, written in Sanskrit. It had wide influence on Sanskrit literature. The Mahaubhaurata mentions a number of schools of Arthashastra principle, and the names of previous writers from the fifth century B.C. agreed with those found in the Arthasastra of Kautilya. Kautilya, also recognized as Vishnugupta and Chanakya, is traditionally credited as the author of the text.
Arthashastra entails the science (sastra) of wealth/earth/polity (artha). 'Artha' however is bit wider and an all-embracing term with different meanings. In 'Arthashastra' itself, it is being used in various contexts, indicated by L N Rangarajan in his translation of Kautilya -Arthashastra. It is used in the sense of material well-being, in livelihood, economically productive activity trade etc. This is alike with 'wealth' which is defined in 'Wealth of Nations'. In simple way, 'arthashastra' can be explained as 'science and art of politics and diplomacy'. This treatise is divided into sixteen books dealing with virtually every topic concerned with the running of a state, taxation, law, diplomacy, military strategy, economics, bureaucracy etc. The book is a masterwork which includes an array of topics like statecraft, politics, strategy, selection and training of employees, leadership skills, legal systems, accounting systems, taxation, fiscal policies, civil rules, internal and foreign trade etc. Arthashastra backs rational ethic to the conduct of the affairs of the state. The emphasis is on systematisation of law and uniformity of law throughout the empire.
Kautilya's Arthasashtra is magnificent work on ancient political thought which was undoubtedly composed between 3rd-2nd Century B.C. Kautilya was the great Prime Minister of Chandragupta Maurya. Kautilya's Arthashastra is mainly a work on the art of government. In his political and administrative ideas, the focus of attention was the king. According to his beliefs, for the smooth functioning of administration and for the welfare of the people, the king had to be acquainted in the four Vedas and four sciences of government (Anvikashaki Trai, Varta and Dandniti). Kautilya's administrative and judicial structure was hierarchical in nature. As for impartiality, he emphasised on the principal of equity and immediacy. As for law and order, he believed that law was an imperial command enforced by sanctions. Dissimilar many other authors in the community, Kautilya is exceptional Indian political philosopher who was both thinker and statesman. He contributed in various social and political revolutions of his Age and abstracted from his study of conflicts some general principles capable of universal application and effective in all times and ages. With more and more studies in the field of politics and economics and with a modern outlook and understanding of world affairs, the significance and indebtedness of Kautilya's 'arthashastra' is incontrovertible.
Kautilya's arthshastra had wide influence of Sanskrit literature (Sharma, 2001). In the previous stages of its history, the science of politics was termed raujadharma, but when the study was extended to include both politics and economics, it was called arthasastra, (In treatises which emphasize that fear of retribution is the real basis of order, the term dandaniti is sometimes employed.) Most political thought presumed the existence of a monarchical form of government, and politics was consequently demarcated as the science of monarchy. The intent of arthshastra texts was to guide the king and his ministers, and they included such subjects as public administration, economic regulation, foreign policy, techniques of warfare, and civil law. The most significant of these works is the treatise generally attributed to Kautilya, the minister of the first Mauryan ruler.
Arthasastra, written in Sanskrit debates theories and principles of governing a state. It is not an account of Maurya administration. The title Arthashastra, which means "the science of material Gain" or "science of Polity", does not leave any doubts about its ends. Kautilya asserted that the ruler should use any means to attain his goal and his actions required to moral sanction. The only problems debated are the most practical kind. Though the kings were allowed a free restraint, the peoples were subject to set of rules. This double standard has been cited as an excuse for undesirability of the Arthashastra, though the real cause of its ultimate neglect was the creation of a totally different society to which these methods were no longer applied.
Arthashastra remains exclusive in all of Indian literature because of its total absence of specious reasoning, or its unabashed support of scholars continued to study it for its clear cut opinions and formal prose till the twelfth century. Espionage and the liberal use of challenging agents is recommended on a large scale. Murder and false accusations were to be used by a king's secret agents without any thoughts to morals or ethics. There are chapters for kings to help them keep in check the premature desires of their sons and similarly chapters intended to help princes to prevent their fathers' authoritarian authority. However, Kautilya regretfully admits that it is just as difficult to detect on official's fraudulence.
Economic ideas of Kautilya in Arthshastra: Kautilya's economic treatise Arthshastra is an idea work, a perfect balance between State management and people's welfare which was created 2,500 years before. He was a great statesman as well as great intellectual. He described Economics as the most important aspect as it provides the basis for human existence and survival. He performed a dominant role in the formation of Maurya Dynasity. With his guidance, empire conquered growth with stability with the help of strong administration and efficient fiscal management. He believed in public welfare because when his work gave a strong focus on the wealth, effectiveness and wellbeing of the king, his actual objective was not to benefit the king but to benefit the people.
Arthsashtra sets the conceptual groundwork for making India the first welfare state. He backed welfare in all spheres. He did not talk only about human welfare but paid attention to animal welfare also. He states that "In the happiness of his subjects lies the king's happiness, in their welfare lays his welfare. He shall not consider as good as only that which pleases him but treat as beneficial to him whatever pleases his subjects" He supported the protection of livelihood, of weaker section, consumer protection and even the welfare of prisoners also. The King's dharma is to be just, fair and liberal in protecting his people. His boldness to his people should be like attitude of a father towards his children. Kautilya demarcated the model ruler as one "who is ever active in promoting the welfare of the people and who endears himself by enriching the public and doing well to them."
Kautilya is not principally concerned with broad political speculation on the origin and nature of the state (India provides no philosophical text that can be compared with the major theoretical works of Europe), and his originality is not to be found in the monarchy of abstraction. The treatise is a collection and summary of earlier Arthasastra writings. Of the three ends of human life, virtue, wealth, and enjoyment, Kautilya allocates first importance to wealth, but he is always aware of the instrumental value of religion and principled norms in preserving the structure of society. He permitted the king to determine for himself what shall have the sanction of law, although the Vedas are accepted as sources of dharma, and statute law must be well-matched with the sacred texts. Despite the importance he ascribed to the role of the king, Kautilya is practical in his approach and would give importance to that component of dominance which happens to be of most consequence at any particular time.
In Indian theory, independence was usually thought to cover seven elements:
- - The king
- - The ministers
- - The populace
- - The fort
- - The treasury
- - The army
- - The ally
The theory, in which diplomacy is made an integral part of politics, is intended to show the necessary conditions for the effective functioning of the state.
Governance generally incorporates all aspects of the way a country is governed, including its economic policies and regulatory framework. Arthashastra stated that good governance comes with peace and order which can be accomplished through the partnership of different factors in a community. The first of these factors is the leader. The leader is the one held responsible for everything that is happening in a community. In Indian society, the leader or the king plays a vital role as he is the one leading the nation and thus, must display a lot of virtues.
Kautilya had enormous knowledge about different aspects of governance such as taxation, diplomacy, trade, business, administration etc. It is supposed that he also had a good knowledge of medicine and astrology as well. It is a discourse on political economy alike to Machiavelli's, The Prince and hence he has been compared to Machiavelli by some and Aristotle and Plato by others. Kautilya explained the way a state's economy is organized, how ministers should be selected, war conducted, and how taxation should be organized and distributed. He put more emphasis on the importance of a network of detectives and informers which function as an investigation corps for the king, focusing on external threats and internal dissidence.
The Arthashastra provides various qualities that defines a good leader and most of stresses on honesty and responsibility. Kautilya gave much emphasis on this issue as corruption ravaged the Indian society during his time. Even through the passage of time, dishonesty still remains up to the present society.
He followed a general approach to governance and enlightened several areas critical to the operation of a country in depth. The main sections deal with National security and Foreign Policy, Administration of Justice, Strategies related to economic development, Taxation, Labour Management, and Financial Management. According to him, attainment of good governance requires that the objectives of the state are fulfilled and realized. This is possible through accurately organized and guided administration. He proposed that good governance should avoid extreme decisions and actions. Decisions should be taken according to the situation. When assessing Kautilya's four-pronged approach to public finance and state planning, which was actually economics, monetarism and much more, based on "dharma, artha, kama and moksha," many thinkers agreed that understanding human welfare was the basis of Arthshastra. It is said to be the ancient and most extensive treatise on governance and administration of state in the world, which describe theories of state craft and monetarism and also a code of civil and criminal law still applicable currently.
The Arthashastra also dealt with the magistrates of their jobs. In the 4th chapter, it elaborates that, "The magistrate should be impartial, and decide on a case, remaining neutral between the King and the subjects." This indicates that they should be impartial in every trial or case they are handling no matter who the people are involved. This echoes true justice: punishing the guilty and releasing the innocent, an ideal justice system where everyone is judged similarly.
Key element in effective governance is the existence and accomplishments of projects that will enhance the nation. In the Arthashastra, Kautilya offered concrete proposals that must be implemented appropriately. The most important of these is the prioritization of education. This is because in any society, having a good number of human capital is necessary good financial development. In the Arthashastra, Kautilya cited the requirement of extensive training of the people in various fields which resulted to a good outcome in those times. Currently, there is an immense importance of education in all sectors and growth of nation.
Although the Arthashastra's main goal and responsibility is the welfare of the people, Kautilya still includes rules in his treatise the maintenance of the environment and other living things. This is due to the fact that the Indian society values all living things because of their belief.
The Arthshastra linked political governance with economic governance. The end is economic governance while political governance is the means. But as economic objectives are not understood in the absence of political ones, then political governance becomes an end and economic governance the means. 'The end justifies the means', this is supposed to be the basis of Kautilyan beliefs. Political power and material wealth are the means and ends of governance. And good governance - political or economic - depends upon justifying the ends and means as the socio, economic and political circumstances.
Arthashastra explicated that there is a sturdy connection between good governance and the economy of a nation. Kautilya's Arthashastra elaborated that it is contemporary Relevance, "the end is economic governance while political governance is the means" (Chapter 2). It means that appropriate management and good governance has an effect on the economic aspect of a nation. The Arthashastra offered the basic guidelines for the proper management of the economy of the country. Ruler must know how to manage resources, such as monetary funds. It can contribute to the development of the economy. Major factor emphasized by the Arthashastra is agriculture. "The importance of irrigation and providing amenities could be taken up on a priority basis. Systematic cropping patterns and irrigation systems followed by Kautilya is what today's experts need to recognize". Kautilya also identifies organic farming because of its non-usage of chemicals. Beside from this, it is also required to learn different agricultural processes because it will aid in the production and storage of sources that will be used by the society.
Kautilya asserted that to guarantee good governance, there must be a suitably guided public administration, where the ruler should surrender his likes and dislikes in the interest of his subjects, and the personnel running the Government should be responsive. Additionally, Kautilya highlighted that for citizen friendly good governance, there should be consistency in the administrative practices as well as competent ministers and officials owning qualities of leadership, accountability, intellect, energy, good moral conduct, and physical fitness, capable of taking quick decision. Kaufmann and Kraay stated that‟ the concept of Governance is not new. Kautilya presented key pillars of the art of governance emphasizing justice, ethics and anti-autocratic tendencies. He further detailed the duty of the king to protect the wealth of the state and its subjects, to enhance, maintain, and it does also safeguard such wealth as well as the interests of the subjects." A ruler must administers justice on the basis of four principles: righteousness, evidence, history of the case, and the prevalent law, shall conquer the earth. Kautilya articulated in the Arthashastra that a nation would benefit from trade if certain "safeguards and policy measures" are present. The trade policies of the country are implemented and are not offensive for the other parties would ensure the benefits of the nation when it comes to trading. This promotes trust and well-being for both parties.
Kautilya on Law and Justice: Kautilya upheld that it is indispensable duty of government to maintain order. He describes 'order' broadly to include both social as well as order in the sense of thwarting and punishing criminal activity. Arthashastra incorporate both the civil law and criminal law. Kautilya attributed a lot of importance to 'dharma'. According to him, 'the ultimate source of all law is dharma'. He enticed in the name of 'dharma' to the sense of honour and duty and to human dignity, to moral responsibility and to enlightened loyalty. It is quite understandable that the judge in the arthashastra was called 'dharmashta' or upholder of dharma. He said that so long every 'Arya' follows his 'svadharma' having due regard to his 'varna' and 'ashrama' and the king follows his 'rajdharma', to sustain social order.
Kautilya mainly focused on duties of King to maintain law and order in the society. He writes in Arthashastra, "Because the King is the guardian of right conduct of this world with four 'varnas' and four 'ashramas' he can enact and promulgate laws when all traditional codes of conduct perish." The King was looked upon an embodiment of virtue, a protector of dharma. He too was overseen by his dharma as any other citizen was. Thus, if any actions of the King went against the predominant notion of dharma, associations and/or the individual citizens were free to question him. He recalls every time that 'dharma' alone is guiding star for every king, or rather every individual and that following 'dharma' one shall have a life of dignity while social order prevailing in society.
He comments, "A King who administers justice in accordance with 'dharma', evidence, customs, and written law will be able to conquer whole world". Kautilya acknowledged the importance of rational law or King's law and its importance to 'dharma', 'vyayhara' and 'charitra'. He upheld that King's law was to be in harmony with the injunctions of the three Vedas wherein the four 'varnas' and 'ashramas' are defined. King was not the only interpreter of dharma. In fact, there was no specific institution devolved with the authority of interpreting dharma. Every individual was believed competent to interpret it. This was an important factor in guaranteeing the non-religious character of the Vedic state.
Kautilya did not interpret law to be a manifestation of the free will of the people. Thus sovereignty, the authority to make laws, did not vest with inhabitants. Laws were derived from four sources, dharma (scared law), vyavhara (evidence), charita (history and custom), and rajasasana (edicts of the King). Kautilya recommended that any matter of dispute shall be judged according to four bases of justice. These in order of increasing importance are:
- - 'Dharma', which is based on truth
- - 'Evidence', which is based on witnesses
- - 'Custom', i.e. tradition accepted by the people
- - 'Royal Edicts', i.e. law as promulgated.
If there is conflict among the various laws, dharma was supreme. The ordering of the other laws was case specific. Rajasasana ordered the relationship between the three major social groupings, the citizen, the association, and the state. The constitutional rules at the state level were specified in the rajasasana but the constitutional rules at the level of the association were to be decided by the members of the association. The mutual choice and the operational level rules of the association were also decided by the members of the association though the state did promulgate laws to safeguard the individual member from the oppression of the majority in the association. Arthashastra sketches a system of civil, criminal, and mercantile law (now it is called business laws).
Foreign trade is vital element of any economic system. Kautilya accepted that foreign trade in goods and services is a major source for snowballing the state wealth. He ascribed that foreign trade should be stimulated by providing some incentives such as exemption from taxes so that foreign traders to make a profit. He gave huge importance to imports. He further spoke that foreign trade is supportive to increase the supply of those goods which may not be available domestically. Through imports, a state can obtain goods more cheaply from foreign sources. In this way, he framed a comparative advantage view of foreign trade. He said that it is beneficial for the different kingdoms when the product being imported are cheaper than those can be obtained domestically. He accepted that trade based on the principal of comparative advantage would be beneficial for both exporting and importing nations. Trade is an important source of revenue for the Treasury.
The Arthashastra favours foreign trade and urges the king to take part in it through his overseer of trade. He should encourage the import of goods produced in foreign countries by permitting concessions. And those to bring such products in ships. He should grant exemption from taxes that would enable them to make a profit. And no lawsuit in money matters should be allowed against foreign trades except such as members of local guilds and their associates (Tom Trautmann, 2016). Thus the import of goods is treated as desirable practice. But at the same time exporting should be permitted for those goods that are abundant in quantity (Tom Trautmann, 2016).
Kautilya supports the use of tariffs, both export and import duties. Kautilya backed attracting foreigners who possess good technical knowledge. He Supports the use of tariffs, both import and export duties. He suggested heavy taxation on those foreign goods which are items of luxuries and on the other hand on the articles of common consumption light duties were imposed. Any item which is highly beneficial for the country should be free from any import duties. He was the first person to discuss the passport is necessary to cross the boundaries.
Jha and Jha(1997) indicated that "Chankya paid supreme importance to the maintenance of a rich treasury, which positively affected entire activities of the administration." He focused on good fiscal management and the ways to development of all the sectors of the economy. According to him, public revenue does not exist for the desire of the king but as a fund to be utilised to augment the wealth of nations. He confessed the taxation is the main source of revenue. The power of taxing of the state is boundless but taxation should not be excessive. He supported that tax base should be increased not the tax rate. He commented the excessive burden of tax on people. Kautilya stated that King must collect taxes like honey bee, enough to sustain but not too much to destroy."
Kautilya indirectly suggests a linear income tax. He highlights fairness, stability of tax structure, fiscal federalism, avoidance of heavy taxation, ensuring of tax compliance and subsidies to encourage capital formation. He advocated limiting the taxation power of the State, having low rates of taxation, maintaining a gradual increase in taxation and most importantly devising a tax structure that ensured compliance many postulates of Kautilya's philosophy of political economy are applicable to modern times. Preferably, the government should collect taxes and do welfare of people. Kautilya's system of taxation involved the elements of sacrifice by the taxpayer, direct benefit to the taxpayers, redistribution of income, and tax incentives for desired investments. He suggested tax holiday as an incentive which means if any one brings new land under cultivation, he should be relieved from agricultural tax for at least two years. He advocates a mixed economy and argued for a very active role of government. His conversation on taxation gave an idea of three principles that include, taxation power is limited, taxation should not be heavy and excessive and tax increase should be reasonable. He recommended a system of tax collection and public expenditure of revenue in such a way as to build up the permanent revenue yielding capacity of the economy. He stated that tax base should be increased not the tax rate. The functional relationship which conversed kautilya in Arthsashtra between the rate of income tax and the magnitude of tax revenue is now said in terms of Laffer curve.
He encouraged indirect taxes such as excise and custom duties and direct taxes as income tax on individuals, wealth tax, and profession tax. He also promoted land revenue, water tax and toll, fine and penalties. According to him, tax receipts can be divided into three parts; income earned through taxes on goods produced within a country, Income earned through taxes on goods produced in the capital and income earned through taxes on imports and exports. He supported that wealthy people should pay higher tax according to their paying capacity. In this way, he considers the ability to pay approach. Tax should be levied one in a year.
Growth Oriented Public Expenditure:
Kautilya supported that most of the revenue generated from taxation should be spent on creative activities and public welfare. He argued different items where state should incur expenditure such as on national defence, public administration and salaries of the ministers, government departments, maintenance of national store house and granaries, maintenance of armies and on the acquisition of valuable gems, stones and ornaments and whatever was left should be deposited to the treasury.
In Arthashastra, it is elucidated that law was not viewed just as code of prohibition, nor was it limited to corrective justice of law courts. Its range was wider than ethics itself and institutions were creation of law while traditions and customs rested on its sanctions. All philosophies of society were formed by it and law was blended with religion, with morality and with public opinion and by its subtle operations subjected the society to its will. The role of law in the society was to bring a just order in society and the remarkable task was to be carried by the King along with his assistants.
Kautilya indicated in his famous verse:
"In the happiness of his subjects lies the King's happiness;
In their welfare his welfare.
He shall not consider as good only that which pleases him but,
Treat as beneficial to him whatever pleases his subjects".
The Arthaśaūstra treatise elaborated that writer is slightly concerned with ethical considerations. Political expedience had been a characteristic of the Arthasastra tradition, and in such works as the Santi Parvan right is likened with might in a world in which the stronger live upon the weaker. Kautilya generally recommends unprincipled tactics only against those who would undermine the social order, and he is aware of that power, if not restrained in its use, can be unhelpful of itself. The writer of the Arthasastra was sensitive to the economic bases of power and opposed any distributing tendency that would wane the control of the state over the economic life of society. Yet the state should not seek to eradicate the independent group life of the community. The caste structure was recognized as long as the general well-being was not prejudiced by narrow class rights. The Arthasastra signifies an important step in the direction of authority based on the interests of all. The king was recommended to see no interest other than the interest of his subjects. However, Kautilya clarified that affluence rests on the good will of the people and that the power of the state depends on wealth. This idea of authority must necessarily include many functions formerly reserved to institutions that were not considered political.
The Nutisaura of Kamandaka, usually retained in the Gupta period (fourth or fifth century a.d.), is basically an synopsis of the Arthasaustra, although the later writer disregards a number of subjects that Kautilya clearly believed of great importance. Two-thirds of the Kamandaklya Nitisara relates to foreign policy and the conduct of conflicts. All the literature that has been considered far was shaped in northern India, and, except for Buddhist writings, in Sanskrit. Several Jaina texts can be categorized among the Arthasaustra literatures.
A Western Perspective on Kautilya's Arthashastra:
However, the influence of Kautilya to economy has been ignored by western researchers despite the fact that his coverage of this subject was perhaps the most sophisticated and broadly based on internationally until Adam Smith published his Wealth of Nations in 1776.
The influential treatise, Arthashastra discovers issues of social welfare, the collective ethics that hold a society together, counselling the king that in times and in areas distressed by famine, epidemic and such acts of nature, or by war, he should initiate public projects such as building irrigation projects, building forts around major strategic holdings and towns, and exempt taxes on those affected. The text was powerful on other Hindu texts that followed, such as the sections on king, governance and legal procedures included in Manusmriti. The Arthashastra was written at the end of the fourth century BC, it seems to have been revived only in1905, after centuries of oblivion. The dissertation in its present shape is most likely not the text written by Kautilya, though it is perhaps based on a text that was authored by Kautilya; and is no case can the text in its completely be credited to Kautilya on account of numerous stylistic linguistic distinctions.
Relevance of Arthsashtra in modern time:
Kautilya is one of the most renowned Indian political philosophers. Though, he lived a long time ago, certain philosophies from his theory are still applicable in modern political framework. The book, written in Sanskrit elucidates theories and principles of governing a state. Kautilya established an extremely vital imperative: governance, polity, politics, and progress have to be linked to the welfare of the people. When assessing the some economic ideas of kautilya, it can be understood that even the terminology employed in Arthsashtra may have changed but the nature and role of state in the economic system seem persistent in all settings. Covering various topics on administration, politics and economy, it is a book of law and a treatise on running a country, which is pertinent even today. His philosophies remain prevalent today in India.
He offered cherished basis for economic science. It comprises of very useful economic ideas on foreign trade, taxation, public expenditure, agriculture and industry. Good governance and stability are inseparably linked. If rulers are responsive, accountable, removable, recallable, there is stability. If not, there is uncertainty. This is even more applicable in the present democratic system. He recommended that heavy taxation should be avoided. If tax rates are high, public will not be willing to pay the tax and discover the ways of tax evasion. Low rate of taxation will produce more revenue to the state.
He was well mindful that terms of trade were not just depending on economics but also on various factors. There is no autonomous mechanism that will ensure that a nation would benefit from trade in the absence of certain precautions and policy measures. Social welfare is the main focal point of kautilya‟s economic notions. The State was required to help the poor and helpless and to be proactive in contributing to the welfare of its citizens. Kautilya gave more emphasis to human capital formation that is relevant in current times because development is not possible without human capital growth. Besides these ideas, there are a number of things in Arthsashtra which is very significant such as conservation of natural resources. Arthsashtra provides much basic knowledge about economics, and several of his ideas are still important in today's economic system.
To summarize, Arthashastra is an exceptional test in all of Indian literature because of its total absence of erroneous reasoning, or its blatant support of realpolitik, and scholars continued to study it for its clear cut arguments and formal style till the twelfth century. The Arthashastra provides broad coverage on the overall economy, which includes: infrastructure (roadwork, irrigation, forestry, and fortification), weights and measurements, labour and employment, commerce and trade, commodities and agriculture, land use and property laws, money and coinage, interest rates and loan markets, tariffs and taxes, and government expenditures and the treasury. It is noteworthy that a book such as 'Arthashastra' should have been written more than 2000 years ago in northern India. It is a book of substantial size. It includes economics, political science, public administration, low and statecraft. It is projected to provide practical advice for the management of the state and thereby enhance the wealth of the nation.
Especially, Arthashastra is a discourse on political economy interpreted in its broadest sense. It was written somewhere between 321 and 286 BC. A Modern of Aristotle, Kautilya, a Brahmin, played a governing role in the formation and functioning of Maurya Empire. Afterward under his leadership, growth with stability was conquered in the empire with the help of strong administration and efficient monetary management. His accomplishment in the domain of scholarship is certainly creditable. The 'Arthashastra' consists of detailed analysis of different aspects of ancient Indian economy." Intelligence and the liberal use of stimulating agents is suggested on a large scale, Kautilya remorsefully acknowledges that it is not easy to identify an official's deceit. Kautilya has delivered a comprehensive and explanatory description of the duties, responsibilities and role of the king, prince(s), ministers, and other state officials. As for the state's political administration, Kautilya provided a complete commentary as to how this should be effectively undertaken. He gave instructions about the defence of the state's limits, protection of the forts, and the manner in which the attack by the rival must be controlled. The Arthashastra categorizes legal matters into civil and criminal and it stipulates extravagant strategies for administering justice in terms of evidence, procedures and witnesses. It can be said that Kautilya‟s Arthshastra offers valuable foundation for economy. It consists of valuable insights about finances. It can be used to glen of significance to modern time and can be useful to exemplify several contemporary economic thoughts. He offered a set of different economic policy measures to encourage economic development.