Kautilya was an Indian philosopher who authored the Arthashastra, an ancient treatise on governance, economics, and political administration. The Arthashastra provides guidance for rulers on topics such as foreign policy, administration, finance, and social welfare. Many of Kautilya's principles of stable governance, responsive officials, infrastructure development, and linking economic objectives to people's welfare remain relevant today. His work had a significant influence on rulers and statesmen in ancient and modern South Asia.

1. Kautilya and his contribution to ‘The
Political Economy of Arthashastra’
Compiled by:
Prof Khondoker Mokaddem Hossain
Pro VC, Bangladesh Open University and
Founder Director
Institute of Disaster Management and Vulnerability
Studies; former Sociology professor
University of Dhaka
Email: mokaddemdu@yahoo.com

2. • Arthasastra is a very famous treatise on ancient
India. It was written around 300 B.C.The book
deals with conomics,administration,politicalideas,
ecology and various other topics.
• The book is divided in to fifteen chapters.
• Apart from Arthashastra, Kautilya wrote several
other books such as Chanakya-Sutras (Rules of
Science) and Chanakya-Rajanitisastra (Science of
Government Policies).
• He is India‟s most illustrious political economist
of all time. He was a true statesman who bridged
the gap between experience and vision. For him,
good governance was paramount.

3. • He explains the necessity of having strong government
finances and an able army. It states that themoral duty
of the king is to increase prosperity, ensure judicial
fairness, and provide national security.
• The book also describes duties of other key positions in
the government such as Police chief, Chief Justice,
Treasurer, Defense minister, Commerce Minister and
others.
• The Arhashastra predates any similar body of work
from the Greek, Roman or Chinese civilizations and is
the source of many modern practices such as double-
entry book keeping method, audits, etc. (Dr. Renu
Tanwar, 2014).

4. • The Arthashastra is the title of a handbook for running
an empire, written by Kautilya (also known as
Chanakya, c. 350-275 BCE) an Indian statesman and
philosopher, chief advisor and Prime Minister of the
Indian Emperor Chandragupta, the first ruler of the
Mauryan Empire.
• The title Arthashastra is a Sanskrit word which is
normally translated as The Science of Material Gain,
• although Science of Politics or Science of Political
Economy are other accepted translations for Kautilya’s
work.

5. • The Arthashastra explores issues of
social welfare,
• the collective ethics that hold a society together,
• advising the king that in times and in areas
devastated by famine, epidemic and such acts of
nature, or by war,
• he should initiate public projects such as
creating irrigation waterways and building forts
around major strategic holdings and towns and
exempt taxes on those affected.
• The text was influential on other Hindu texts
that followed, such as the sections on king,
governance and legal procedures included
in Manusmriti.

6. • Moreover the book contains detailed
information about specific topics that are
relevant for rulers who wish to run an
effective government.
• Diplomacy and war (including military tactics)
are the two points treated in most detail but
the work also includes recommendations on
law, prisons, taxation, irrigation, agriculture,
• mining, fortifications, coinage, manufacturing,
trade, administrations, diplomacy, and spies.

7. • The Arthashastra then posits its own theory that
there are four necessary fields of knowledge,
the Vedas, the Anvikshaki(philosophy
of Samkhya, Yoga and Lokayata),
• the science of government and the science of
economics (Varta of agriculture, cattle and
trade).
• It is from these four that all other knowledge,
wealth and human prosperity is derived.
• The Kautilya text thereafter asserts that it is the
Vedas that discuss what is Dharma (right, moral,
ethical)

8. • and what is Adharma (wrong, immoral,
unethical), it is the Varta that explain what
creates wealth and what destroys wealth,
• it is the science of government that
illuminates what is Nyaya (justice, expedient,
proper) and Anyaya (unjust, inexpedient,
improper), and
• that it is Anvishaki (philosophy)that is the
light of these sciences, as well as the source
of all knowledge, the guide to virtues, and
the means to all kinds of acts.

9. • He says of government in general:
• is dedicated to the continuous training and
development of the king, where the text
advises that he maintain a counsel of elders,
from each field of various sciences, whose
accomplishments he knows and respects.
• The text further describes the process of
selecting the ministers and key officials,
which it states must be based on king's
personal knowledge of their honesty and
capacity.

10. • The text highlights that, the government, in secret,
will monitor of the integrity and lack of integrity of all
ministers and high officials in the kingdom.
• Those officials who lack integrity must be arrested.
• Those who are unrighteous, should not work in civil
and criminal courts.
• Those who lack integrity in financial matters or fall for
the lure of money must not be in revenue collection or
treasury, and those who lack integrity in sexual
relationships must not be appointed to Vihara services
(pleasure grounds).
• The highest level ministers must have been tested
and have successfully demonstrated integrity in all
situations and all types of allurements.

11. • The ideas expressed by Kautilya in the
Arthashastra are completely practical and
unsentimental.
• Kautilya openly writes about controversial
topics such as assassinations, when to kill
family members, how to manage secret
agents, when it is useful to violate treaties,
and when to spy on ministers.
• Because of this, Kautilya is often compared to
the Italian Renaissance writer Machiavelli,
author of The Prince, who is considered by
many as unscrupulous and immoral

12. • It is fair to mention that Kautilya's writing is
not consistently without principles in that he
also writes about the moral duty of the king.
• He summarizes the duty of a ruler, saying,
“The happiness of the subjects is the
happiness of the king; their welfare is his.
• His own pleasure is not his good but the
pleasure of his subjects is his good”.
• Some scholars have seen in the ideas of
Kautilya a combination of Chinese
Confucianism and Legalism.

13. • Kautilya’s book suggests a detailed daily schedule for
how a ruler should structure his activities.
• According to his view, the duties of a ruler should be
organized as follows:
• First 90 minutes, at sunrise, the ruler should go
through the different reports (revenue, military, etc.).
• Second 90 minutes, time for public audiences.
• Third 90 minutes for breakfast and some personal
time (bath, study, etc.).
• Fourth 90 minutes for meeting with ministers.
• Fifth 90 minutes for correspondence.
• Sixth 90 minutes for lunch...

14. • Protection of Forests and Wildlife
• Arthashastra states that forests be protected and
recommends that the state treasury be used to feed
animals such as horses and elephants that are too old
for work, sick or injured.
• However, Kautilya also recommends that wildlife that
is damaging crops should be restrained with state
resources.
• The king should grant exemption [from taxes]
to a region devastated by an enemy king or tribe, to a
region beleaguered by sickness or famine.
• He should safeguard the agriculture and its production

15. • when it is stressed by the hardships of fines,
forced labor, taxes, and animal herds
when they are harassed by thieves, vicious
animals, poison, crocodiles or sickness.
• He should keep trade routes [roads] clear
when they are oppressed by anyone, including
his officers, robbers or frontier commanders
when they are worn out by farm animals.
• The king should protect produce, forests,
elephants forests, reservoirs and mines
established in the past and also set up new
ones.

16. • The Arthashastra offers a list with the seven
components of the state: The king, the
ministers, the country (population,
geography and natural resources),
• fortification, treasury, army, and allies.
• Kautilya goes on to explain each of these
individual components and stresses the
importance of strengthening these elements
• in one’s kingdom and weakening them in the
enemies’ states by using spies and secret
agents.

17. • One of the most interesting ideas presented
by Kautilya is the “Mandala theory of
interstate relations”.
• A mandala is a schematic visual
representation of the universe, which is a
common artistic expression in many Asian
cultures.
• Kautilya explains that, if we can imagine our
kingdom in the centre of a circular mandala,
then the area surrounding our kingdom
should be considered our enemies’ territory.

18. • The circle surrounding our enemies’
territories belongs to our enemies’ enemies,
who should be considered our allies since we
will share many interests with them.
• The circle surrounding our enemies’ enemies
territory will be the allies of our enemies.
• Kautilya then goes on analysing twelve levels
of concentric circles and offers detailed
advice on how to deal with each state
according to the layer they belong to in the
mandala construct (Ancient History
Encyclopedia).

19. • The various types of foreign policy are also
explained in the Arthashastra: peace, war,
neutrality, preparing for war, seeking protection
and duplicity (pursuing war and peace at the
same time with the same kingdom).
• The Arthshastraequates political governance with
economic governance.
• The end is economic governance while political
governance is the means.
• But as economic objectives are not realized in
the absence of political ones, then political
governance becomes an end and economic
governance the means.

20. • 'The end justifies the means', this is supposed to
be the basis of Kautilyan philosophy.
• 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 condition.
• According to Kautilya, to ensure good governance
there must be a properly guided public
administration, where the ruler should
surrender his likes and dislikes in the interest of
his subjects,

21. • and the personnel running the Government
should be responsive and responsible.
• Kautilya further emphasized that for citizen
friendly good governance there should be
uniformity in the administrative practices as
well as competent ministers
• and officials possessing qualities of
leadership, accountability, intellect, energy,
good moral conduct, and physical fitness,
capable of taking prompt decision.

22. • Kautilya recognised that foreign trade in goods and
services is a major vehicle for increasing the state
wealth.
• He said that foreign trade should be encouraged by
providing some incentives such as exemption from
taxes so that foreign traders to make a profit.
• He gave very much importance to imports. Hefurther
said that foreign trade is helpful to increase the supply
of those goods which may not be available
domestically.
• Through imports a state can be obtained goods more
cheaply from foreign sources. Inthis way he formulated
a comparative advantage view of foreign trad

23. • Kautilya was a pioneer in diplomacy and
government administration. His merit was
based not only on
coming up with very important practical
advice for government,
• but also in organizing his theories in a
systematic and logical fashion.
• Kautilya’s political vision had a heavy
influence on Chandragupta, the first Indian
ruler who unified Northern India under a
single political unit for the first time in
history (Cristian Violatti, 2014).

24. Growth Oriented Public
• ExpenditureKautilyaadvocated that most of the
revenue generated from taxation should be spent
on productive activities and public welfare.
• He discussed different items where sate should
incur expenditure such as on nationaldefence,
• publicadministration and salaries of
theministers,government departments,
maintenanceof national store house and
• granaries, maintenance of armies andon the
acquisition of valuable gems, stones and
ornamentsand whatever was left should be
deposited to the treasury.

25. • Infrastructure
• Kautilya considers infrastructure as very
important for the state development and also
very useful for promoting commercial and
trade activities.
• He suggests that state should invest in
transport infrastructure specially roads so that
foreign trade and commercial activities can be
increased and so that states revenue.
• Roadswouldbe helpfulin opening up new
markets for both domestic andimported
products

26. • Relevance of Arthsashtrain modern time.
• Good governance and stability are inextricably
linked.
• If rulers are responsive, accountable, removable,
recallable, there is stability. If not, there is
instability.
• This is even more relevant in the present
democratic setup.
• Heavy taxation should be avoided.
• If tax rates are high, public will not be willing to
pay the tax and find out the ways of tax evasion.
• Low rate of taxation will yield more revenue to
the state.

27. • Kautilya demonstrated an extremely vital imperative:
governance, polity, politics, and progress have to be
linked to the welfare of the people.
• Havingdiscussed the some economic ideas of kautilya,
it can be said that even the terminology employed in
Arthsashtramay have changed but the natureand role
of state in the economic system seem persistent in all
settings.
• Covering various topics on administration, politicsand
economy, it is a book of law and a treatise on running a
country, which is relevant even today.

28. • His ideas remain popular to this day in most of
the democratic political system including
Bangladesh, India, Sri lanka and other soth
and South Asian countries.
• He provided valuable basis for economic ,
social, moral, ethical, cultural, humanitarian,
philosophical, financial, psochological, judicial,
legal, and science.
• It also contains very useful economic ideas on
foreign trade, taxation, public expenditure,
agriculture and industry.

29. • Social welfare and wellbeing are the centre
points of kautilya‟s economic ideas.
• The State needs to extend her help to the
poor, vulnerable and destitutes and helpless
and to be proactive in contributing to the
welfare of its citizens.
• The emphasis that Kautilya gave to human
capital formation is relevant in current times
because development is not possible without
formation of human capital.

30. • Even today, the Arthashastra is the number
one classic of diplomacy in Indian sub-
continent and, within this category, it is one of
the most complete works of antiquity.
• A number of institutions in Indian sub-
continent such as universities and diplomatic
offices have been named after Kautilya in
honour of his work.
• Even important Indian political figures like
Shivshankar Menon, who became the
National Security Advisor of India in 2010 CE,
have been influenced by Kautilya’s ideas.