Rajasthan Board RBSE Class 11 Economics Notes Chapter 12 Economic Ideas of Kautilya
→ Acharya Kautilya is regarded as the father of economics. He is also known as Chitragupta and Vishnugupta.
→ Acharya Kautilya’s ideology emphasizes materialism.
→ The contemplation of Acharya Kautilya on economic problems and economy is considered very important.
→ Acharya Kautilya was originally a thinker, philosopher and diplomat rather than an economist.
→ Acharya Kautilya composed his famous treatise Arthashastra’ between 321 and 300 BC.
→ Acharya Kautilya’s Arthashastra has a total of 15 sections, 150 chapters and 180 subjects and 6000 hymns.
→ Kautilya has divided human life into three parts based on wealth, religion and sensual pleasure.
→ In these three he has given primacy to wealth because no activity is possible without wealth.
→ Kautilya has given priority to wealth over religion. According to him, “The basis of happiness is religion, and the basis of religion is wealth, and the basis of wealth is the state.
→ Kautilya considers the wealth earned through proper way as justified.
→ Kautilya has called agriculture, animal husbandry and trade as “Vaarta”.
→ Kautilya has defined economics in these words– “The conduct or livelihood of people is called Artha. Populated land itself is Artha. The discipline of study which helps acquire such land, develop it (or nurture it) and provides measures to do this is called economics.”
→ Public Finance: According to Kautilya, it is the king’s duty to keep increasing the state’s income to counter situations arising from time to time and to arrange the administration of the state, since all activities of the state depend on the treasury. The King whose treasury becomes empty begins to exploitcity-dwellers and village-dwellers. Kautilya’s public finance system is linked in real terms to the concept of welfare state.
→ He has mentioned four objectives of the state apart from law and order and justice:
- acquiring the unobtained
- protecting the acquired
- ensuring growth of the protected, and
- utilizing the accumulated for welfare of the subjects, or spending the earnings from taxes for welfare of citizens.
→ Public Income : Acharya Kautilya has mentioned many sources of state income, like- Land tax, house tax, incidental tax, import-export tax, sales tax, road tax, canal tax, fisheries tax, labour tax, property tax, etc.
→ The land tax was the main source of state income. Along with this, the municipal tax was a major form of tax. The state also got income from cattle tax and emergency tax.
→ Acharya Kautilya has also prescribed some rules of taxation, such that tax should be realized at the right time, taxation should be fair and justifiable, tax should be in accordance with the capacity of the citizens. He was a strong supporter of financial discipline.
→ Public Expenditures : Kautilya also made it clear that the income of the state should be accurate and accountable. Public income should be spent on the development of agriculture, and social security.
→ Acharya Kautilya has rendered the principles of labour determination of workers. For example, the living subsistence principle of wages, the ability and efficiency principle of wages, the productivity principle of wages, the customary principle of wages, the participation principle of wages.
→ Acharya Kautilya has also described social security schemes, such as pension plans, rules of leisure, employment to poor helpless people, etc.
→ Acharya has also described labour unions and also mentioned their various types such as weavers’ union, mine worker’s union, stone artwork, carpentry, priest, singer, buyer and service association, etc.
→ Acharya Kautilya has clarified that the work is done in exchange of both commodities and currency. When this exchange is done in terms of commodites, it is called barter exchange.
→ Acharya Kautilya has mentioned four types of currency
- Gold coins
- Silver coins
- Standard copper coins
- Kankani copper coins
→ Acharya Kautilya has divided money into two parts- (i) Treasury Entered currencies and (ii) Familiar or Common Currencies.
→ Ordinary transactions of common people were conducted in these currencies, but these could not be entered into the treasury.
→ Production of currency was done in state mints.
→ Kautilya propounded the concept of justified and appropriate prices in the sphere of price determination.
→ In the fair price, the cost of the item and the appropriate benefits are included.
→ According to Kautilya, determination of prices of commodities should be done by officials appointed by the king, called ‘Panyadhyaksha’ and Sansthadhyaksha.’
→ Kautilya made provisions for five kinds of officials to prevent adultration, deceit, smuggling, black marketing, hoarding, not handing over commodity after selling it, etc. and such other malpractices. These are Panyadhyaksha, Shulkadhyaksha, Sansthandhyaksha, Pautavadhyaksha, Antapala.
→ Regarding trade, Kautilya says that the sale of products made within the state should be done at one location, while imported goods should be sold at various places, so that people are not inconvenienced.
→ Kautilya was in favour of importing such things from abroad which were essential but Kautilya suggested prohibition on the export of certain items, such as weapons and ammunition, horses and foodgrains, etc.
Economic Ideas of Kautilya Class 11 RBSE Notes Important Terms
• Vidya – Kautilya has named the branches of knowledge as Vidya. According to them, that which gives knowledge about right-wrong, duty-lack of duty in any particular context, it is called Vidya.
• Varta- In Shukraniti, the vidya is the knowledge of the loss-benefit of man, which has been called Varta. Varta has
been a major subject of the study of princes. Kautilya gives priority to agriculture, animal husbandry, industry and trade in economics.
• Treyi- Treyi is related to moral science. Treyi and Vedic rituals have been considered as the basic premise of protection of the people.
• Aanveekshiki – This is considered to be the criteria through which efforts made for political, and physical objectives can be balanced.
• Dandniti- By punishment, the king does not allow the people to lose their religion. This is the subject of dandniti.
• Panyadhyaksha- State official employed by a King, whose job was to check the quality of commodities and determine their pricing. It also monitors the activities of the traders.
• Shulkadhyaksha- This is also an employee appointed by the King, who collects tax from the traders in the state, and arranges for weighing and selling of goods.
• Sansthadhyaksha- This employee was kept by the king to stop adulteration, selling of sub-, standard goods, and to punish those who weigh less.
• Pautavadhyaksha- It releases weight and measurement material in the state.
• Antapala- It monitors the goods coming from inside the state, and foreign countries.
• Samanapatha- Kautilya has termed waterways through the sea as Samanapatha.
• Pravahana- Kautilya has called vessels coming from the sea, ‘Pravahana’.
• Mint- It is the place where the currency is produced. It is under the control of the state.