THE NEW JANAPADA AND RURAL ECONOMY
It was an age of expansion and planned reconstruction. Kautilya introduced the scheme of administratively and economically viable janapadas. Earlier, the Vratya Prajapati, Mahadeva, had encouraged the formation of small stable nation-states, rashtras. The Manava Dharmasastra had accepted the principle of such states being governed by Kshatriya rulers with the assistance of eight ministers for every state, rajyam.
Both schemes permitted ventures of conquests by kings but they did not envisage annexation of the countries of the vanquished by the conqueror. Kautilya permitted annexation of those countries but subject to certain conditions. These lands could not be exploited to the disadvantage of the native population, jana. Their social customs had to be protected. Political imperialism should not lead to colonial exploitation and cultural imperialism. Kautilyas mega-state honoured this principle while allowing autonomy to the several janapadas under its suzerainty. This positive approach of Kautilya has been deliberately kept out by the western Indologists who have presented him as more crooked, cruel and unethical than Machiavelli.
Janapada as viable economic entity
Every janapada had a bureaucracy and a judiciary drawn from its own population. It had its own local currency and was controlled by the Samaharta, the Minister for Internal Revenue, who adhered to the principle of equity while keeping it integrated. All the Samahartas, Ministers for Internal Revenue, were taken on the central council of ministers of the mega-state, chakra, a confederation of twenty-five states but there was only one Sannidhata, Chancellor of the Exchequer.
Desas were cultural entities differing from one another in their customs. Janapadas were viable economic entities. Kautilya encouraged the concept of Janapada in place of Desa and Rashtra. Rashtras were essentially autonomous rural regions governed by the armed elite stationed in fortified towns. Vratya Prajapati, Mahadeva, made the rashtra a sovereign nation with the nobility, the commonalty, the intelligentsia and the army owing loyalty to it and honouring him as its chief of the people. But this rashtra had numerous states under its parasol.
The two Confederations, Chakras
Kautilya preferred to refer to the entire country as Desa or Prthvi. It extended from the Himalayas in the north to the seas in the south. It was to be brought under one confederation of states, chakra. The mega-state was a step towards it. During the times of Kautilya only the central region, Madhyadesa, lying between, Sindhu and Yamuna and between Sutlej and Narmada was known as Prthvi, the land under the jurisdiction of the commoner-king, Prthu.
As Kautilya outlined his policy for a new janapada and planned reconstruction for the entire sub-continent, the latter had already reached the stage of two confederations facing each other for a final showdown. The chakra initiated by him had opted for this policy. (This stage was reached more than two millennia before Vishnugupta retrieved Kautilyas work and placed it at the disposal of Chandragupta Maurya). Bharata led one of these confederations, chakras, and Prthu the other. Kautilya might have aided the latter. This recognition is necessary for a proper appraisal of Kautilyan Arthasastra.
Circle (Mandala) of five Janapadas and the Conqueror
A janapada had four districts (sthaniya) with the capital, pura, at the centre. Earlier each district had one or more kings and they elected their own chieftain who ruled the janapada as Viraj. He had to take the help of these feudal chiefs (Rajans or Isvaras) and the paura and janapada assemblies.
We may visualise a conglomeration of five such janapadas with their suzerains competing with one another for control over the mandala, a circle of five states. Each suzerain had to score over the other four, ally (mitra), non-ally (amitra), neutral or intermediate (madhyama) ruler and indifferent (udasina) ruler. The successful sovereign is visualised as the vijigishu, conqueror. He did not necessarily annex the territories of the defeated rulers.
Five Circles (Mandalas) and the Confederation (Chakra)
There were five circles (mandalas) with each led by a highly influential and powerful ruler at its helm. All these five powerful rulers present the picture of five circles (mandalas), with each of them trying to overcome the other four, mitra, amitra, madhyama and udasina. The successful among them becomes the chakravarti, head of the confederation of states, controlling twenty-five janapadas including his janapada.
Kautilya envisaged the formation of two such confederations of states before they met for a final showdown or consented to coexist. Kautilya was on the scene when Mamdhata, Kartavirya Arjuna, Bhagiratha, Marutta and Bharata were the five emperors (samrats) who headed the five circles and Bharata had emerged as the head of this chakra of five circles as Chakravarti. Bharata seems to have succeeded Marutta as the head of thie confederation, chakra. Kautilyan economic reorganisation was aimed at making all these numerous janapadas including those that were under the suzerainty of Prthu, economically viable entities. Each janapada was expected to meet the needs of about three to six millions of population.
Demographic Reorganisation (Bk.2 Ch. 1)
Kautilya reorganised the then existing janapadas and also formed new ones. (2-1-1) People were moved out of thickly populated areas within a state to sparsely populated areas. There were also inter-state migrations of peoples. Kautilyas aim was to discourage gravitation towards urban centres, which were then mostly on riverbanks and towards naturally productive areas. Most commentators have failed to note the implications of this demographic reorganisation, which led to the formation of new integrated and economically viable janapadas. Kautilya planned for even distribution of the native population. New settlements (nivesa) came into existence. Abandoned ones were revived. The earlier migrations were towards river basins. This had to be reversed as rivers changed courses and as floods could not be stopped.
Disaster Control and network of new villages in the hinterland
Fire, flood, disease and floods were considered to be calamities caused by invisible forces. Man had in those days no control over them. Kautilya teaches his deuteragonist, the unidentified preceptor (Acharya) the principles of Disaster Control which the latter as a Rajapurohita is expected to know (AS Bk. 8 Ch.4). The Acharya opposed Kautilyas move to get the villages on the riverbanks (which were threatened by floods) vacated and to settle their residents in new villages in the interior close to the forests (which were pushed back).
The Acharya feared that the new villages were prone to catch fire. He had no remedy against bush-fires. Property would be lost forever, he complained. Kautilya argued that while fire destroyed only one village, floods swept away hundreds of villages. The earlier policy of settlements along the riverbanks was altered. People were moved from the towns and settled in the hinterland. A network of new villages, small in size, separated from but yet not far from one another was established.
More areas brought under cultivation
Production-centres were distinct from market-centres and were spread out. The capital was only an administrative centre. The new demographic distribution left only a few villages on the lands likely to be frequently inundated. Of course, the farmers would not have appreciated this forced resettlement. The Acharya voiced their grievances. However Kautilya knew that it was not easy to tame the rivers and that in the new areas, cultivation called for construction of water-works (setu). He encouraged the villagers to co-operate in this endeavour and provided funds from the state.
This resulted in less income for the peasants, as they had to pay for these projects. But more areas were brought under cultivation. The disputation has to be studied in the light of the new agrarian policy to increase the output by increase in the area of lands under irrigation. [It may be noted here that Kautilya did not get support from the aristocracy in this endeavour.] Economic considerations alone and not factors like common custom, dialect and loyalty to the soil determined the pattern of the new janapadas. This process had begun earlier but Kautilya gave the necessary direction. Every janapada was so designed as to have wet and plain lands, moors and forests, hilly tracts and even arid areas within it. It was a predominantly but not totally agrarian janapada. This helped to diversify economic activities.
The Composition of the Village Population
Reorganisation required determining the features of the village, the basic economic unit. Every village would have about 100 to 500 Shudra agriculturist families. (2-1-2) It is necessary to get rid of the stereotypes that we have been unwittingly swallowing about the social and economic structures of the ancient Indian villages.
A village must have had a Brahman teacher-cum-priest, a few Kshatriya policemen and officials, two or three Vaisya shopkeepers. More than ninety percent of the villagers were illiterate Shudra agriculturists. Theoretically, the cultivators, cattle-breeders and traders were designated as Vaisyas. But very few Vaisyas lived in the villages or personally tilled the lands. Shudra families managed most of agricultural operations.
Most of the families belonging to the higher classes (varnas) had migrated to urban areas even before the times of Kautilya. Most Vaisyas were absentee landlords. This was dysfunctional to rural economy. Small independent peasants known Kshudrakas and employee-tillers, Shudras, looked after agricultural operations. The rich among the Kshudrakas later claimed that they were Kshatriyas rather than Vaisyas and proved a terror to all in the rural sector. The Kshudrakas ranked between Vaisyas and Shudras, employers and employees. Kautilya made the Shudra workers, lessees of lands and treated them as Aryas, free citizens, a status enjoyed by Vaisyas till then. [Marxist writers have missed this point.]
Shudras (workers) as lessees of lands
Every family had its house in the midst of its agricultural land with its boundaries measuring one to two krosas on each side. Kautilya seems to suggest that the largest holding should not be more than four times the smallest. The family could not have employed many labourers to till its field. It was basically a self-employed peasant family. It had to work to earn its livelihood.
The lands, which the lessee tilled, had been assigned to him by the state for his lifetime, ekapurushikam (2-1-8). These assignees could not sell or mortgage these lands nor could they will them to their heirs. Ownership reverted to the state on the death of the lessee. These lands had been taken away from their original landlords, as they had not been cultivating them personally. Of course small landlords would have stayed back in the village and supervised the cultivation of their lands. When the lessee died, his son had to seek reassignment of land and renewal of contract.
In a Shudra family, the son did not inherit his fathers property as the latter was not the owner of that property and was only a lessee. Nor did he own the house that stood on that land. He had the right to live in that house, cultivate the land and collect the grains only as long as the contract period was not over. The Kshudraka was a landowner-cum-tiller. The Vaisya was a landowner but not a tiller. The Shudra was a lessee and tiller. Earlier he was an insecure contract labourer (vishti) working on the lands of the Vis (Vaisyas). [One could be a servant, Dasa, under any one of the above, Vaisya, Kshudraka and Shudra.]
Kautilyan rural pattern did not accord with the Zamindari (kulak) model. It was closer to the ryotwari pattern of the southern peninsula. Earlier the lands of the peninsula were open to all and they were referred to as universes, jagats. The entrepreneurs took whatever lands they could cultivate personally and were classified as kshudrakas. The local population lived in stone-houses or in caves or in the open and on meat and fish or on fruits and roots rather than on agriculture. Most land was hard and rocky or thickly forested.
As Vairocana Bali took over as Indra of Chitrapada, Prabhu Sarvabhauma who claimed suzerainty over all the lands was prevailed on to permit to all the right to till the lands, sow the seeds and reap the harvests, I have pointed out in my thesis, Evolution of Social Polity of Ancient India. [Bali was a contemporary of Parikshit, Manu Savarni, Kautilya, Bharadvaja and Krpa.]
Even the king was not the owner of the lands. Lands belonged to the entire society and the cultivators could hold them for their life time or as long as they cultivated them. There could be no hereditary ownership of lands.
The king was expected to encourage the cultivation of lands. Sesha Dharma (the policy outlined by Manu Svayambhuva, Samkarshana and Sesha) permitted the right of ownership of uncultivated lands to those who newly cultivated them. An appreciation of this background is needed for a correct appraisal of Kautilyan policy and the genesis of the rights of ownership. (Manusmrti attributes it to Vayu, one of the first editors of the Vedas. Vayu must have been a Marut chieftain.)
The new village
Agriculturist families were allotted lands adjacent to one another to facilitate mutual protection. The Gopa had to mark the boundaries of the family fields and of the village correctly (2-2-3). Kautilya advanced the principle of optimum-sized villages as the basis for rural reconstruction. New villages had to be formed and deserted villages repopulated. Non-agriculturist families were moved out of the agrarian villages. The postulate that the village had members of all the four varnas and several vocations and that it was a self-sufficient cosmopolitan unit is not tenable.
The village had to trade off its surplus grains to meet its other requirements. The village had about 200 agriculturist families, mostly Shudras. The higher classes, varnas, and non-agriculturist families stayed outside the boundaries of the agriculturist village. Physical distance led to social distance. There were no separate residential areas within the village proper for any group. (Segregation of communities was an urban phenomenon and not a rural one.) Such areas were required to be allotted only in the protected administrative capital, pura.
Samgrahana: Union of Residential Settlements vs. Karvatika
Ten such clusters of neighbouring villages formed a Samgrahana, union of residential centres. It had an administrative officer, three or four Gopas, and a Dharmastha who was an officer of the judiciary and trustee of public property. It had also a market-centre with a stable for horses. It covered a population of about ten thousand and was served by an administrative centre, a court, a market and a police-cum-mail station.
Twenty such unions had a block office, Karvatika and also an industrial production-centre for manufacture of consumer goods, which were marketed to the rural population through the Samgrahana outlets.
Drona (County) and Sthaniya (District)
Two Karvatikas formed a Drona, cup. The administrative centre of the Drona was located between the two Karvatikas. It controlled about 400 villages. Both production-centres and market-centres were away from the administrative centre, Dronamukha, which had a court also. In between two Dronas was situated the headquarters of the district, Sthaniya. It had a large revenue office to which all the Gopas reported. The Sthanika had the rank of a middle-level Amatya and had to report to the Samaharta. The Sthanika controlled about 800 villages with a population of about eight hundred thousand. He supervised two Drona offices, four industrial centres and eight market outlets at Samgrahanas.
Each Sthaniya or Pradesa had a magistrate, Pradeshtr, who controlled the jail also. (He was however under the Sannidhata). It also had a court with three Dharmasthas and three Amatyas (middle level). We have to discard the stereotype of autonomous villages run by panchayats. The rural bureaucracy and judiciary had been built up in a rational manner and had a pyramidal structure.]
The Demography of the Janapada
A janapada covered four Sthaniyas or districts with the capital at the centre. It would have had about 3200 villages with a population of about three million engaged in agriculture and about three hundred thousand in industry, trade, education, pasture, administration etc. The non-agriculturist families resided in the Samgrahanas. Karvatika centres were for small industries, Dronamukhas were administrative centres and the capital was referred to as Pura. Kautilya discouraged gravitation towards urban areas. Thinkers like Kautilya did not accept urbanisation as sign of civilisation. It was a mark of cultural decay and licentiousness and economic exploitation of the masses. Most of the agriculturists were Kshudrakas or Shudras. They also provided the troops for the state.
The janapada was a political entity. Its officials, Amatyas and Dharmasthas, and its troops were its natives. Its highest revenue officer, Samaharta, too was its native. But it was not a totally autonomous unit of the circle of states (mandala) or of the confederation of states (chakra).
Janapada borders and junction of janapadas
Between adjoining janapadas (under the same ruler), at the entrance to the janapada, the officer in charge of the border areas (antapala) had his fort. He was in charge of the forests, which formed a natural barrier between agro-pastoral lands. He had a contingent comprising mainly trappers, Sabaras, Pulindas, Chandalas and forest-dwellers to guard this zone (2-1-6). They were 'antavasayis', residents of outlying areas, a neutral term. [There is no attempt to treat these groups as untouchables.] Inter-janapada courts must have met at janapada junctions located on the border. It may be visualised that the model Janapada described above had a similar Janapada in each of the four directions. The Antapala was directly under the king and not under the Samaharta.
Rural Administration: Brahmadeya Lands and Franchise
Lands given to Rtvigs, Acharyas and Purohitas who were constitutional (Brahman) officials and to Srotriyas, who were Vedic scholars and teachers, were known as Brahmadeya lands. These Brahmans (intellectuals who did not belong to any ecclesiastical order) were exempt from dandakara, tax payable to the society for protection of life and property. As only those who paid taxes were eligible to exercise political franchise, these Brahman beneficiaries had no franchise but were eligible for protection whoever the ruler was.
They claimed that they were not subjects of the ruler and had the right to move to any state, stay anywhere and yet had to be protected by its ruler. Political loyalty could not be demanded from the Brahman intelligentsia. They were not part of the production economy. They could exercise franchise only if they agreed to pay taxes. (Not all Brahmans were eligible to receive Brahmadeya lands).
Their sons and kinsmen, dayadas, could not inherit these lands (2-1-7). These lands could be leased out or sold or mortgaged only to those Brahmans who were similarly exempt from dandakara. A gift once made could not be rescinded. Hence the king could not become the owner of Brahmadeya lands even if the recipient died intestate or was divested of the lands for violation of social or economic codes or for sedition. The land gifted to a Brahman would on his death pass on to the chief of the people, the Prajapati or to the trustee of public property, the Dharmastha.
These lands had been assigned to eligible Brahman scholars to enable them to earn their livelihood and pursue their studies and render free social service as teachers and priests. They were freed from the ignominy of being required to beg from others for their livelihood. While Brahmacharis (students) and Sanyasis (monks) could ask for and accept alms, Grhasthas (householders) and Vanaprasthas (retired senior citizens) could not. The Brahmans who went through all the four stages of life formed only a very small section of the population.
Most of the population had to work throughout life to earn their livelihood. Unlike the Brahmans, they were in the schools only for a few years. (Vide Foundations of Hindu Economic State on Institution of the Duties of the Individual, Svadharma Sthapanam)
Lands as Perks and Taxes on other lands
Heads of departments, accountants and other officers of the Janapada like Sthanikas and Gopas and public servants like physicians, horse-trainers and couriers were assigned lands as perks. These could not be sold or mortgaged. They could hold these lands even after retirement but their offspring could not inherit them. They were state property and were liable to be retrieved. They were exempt from taxes, as the assignees were government servants.
Other lands could be assigned only to tax payers. Arable lands were to be assigned only for lifetime. Those who were cultivating the lands were not to be disturbed (2-1-9). But those persons who did not cultivate the lands lost ownership rights (10). These might be assigned to village servants (grama-bhrtas) or to the Vaidehakas, the weaker section among the Vaisyas. Not all the Vaidehakas were traders (vanijyas) (11).
The Vaidehakas were tenants. They became owners if their Vaisya landlords did not pay attention to the arable lands. The Shudras were lessee-tillers and the Kshudrakas were independent small peasants who personally tilled their lands. Kautilya made payment of estimated tax compulsory without allowing it to be contingent on actual produce (12). This was needed to ensure cultivation of all arable lands and to eschew indifference and complacency. He encouraged entrepreneurs.
Incentives for cultivation: anugraha and parihara
It needs to be remarked here that there are two streams in the extant text of Arthasastra. One of them, the earlier one may be traced to the views of and steps taken by Kautilya and the later one to the amendments made by Vishnugupta to aid the Mauryan administration (3rd century BC). Bk.2 of the Arthasastra belongs to the earlier stage when Kautilya and Krpacharya were reorganizing the social polity including its economy soon after the famous battle of Kurukshetra, which is traced to 3100 BC by Hindu tradition and to 1400 BC by many modern scholars who toe the lines of the Western Indologists.
Grants, cattle and gold coins were offered as loan to the new cultivators. These were repayable at their convenience (2-1-13, 14). This facility was open also to those farmers who were constrained to neglect agriculture, as they had no money to invest in it. All grants (anugraha) and compensations (parihara) were so programmed that they benefited the treasury and caused no loss to it (15). Only increase in produce could lead to increase in state revenue. Loans had to be recovered. The people are cautioned that a king whose treasury is poor is bound to harass the paura-janapada (16). Hence they should increase the production, pay the taxes and repay the loans. [The issues seem to be modern but in fact they have been part of agrarian economy since the earliest times when the cadres of landlords came into existence.]
Kautilya agrees that at the time of the first settle-ment in a particular place (nivesakalam) and when families are required to shift from one place to another (yathagatakam) they have to be recompensed for expenses incurred and losses sustained (17). [Kautilya does not concede the claim that one is permanently attached to a particular piece of land even though he is a son of the soil and that he can not be deprived of it or moved from it.]
He agrees with respect to compensation for retirement from occupation that the king should give his blessings even as a father aids his son in distress (18). The principle of paternalism involved in anugraha implies that the father aids the son in need and the son would pay his debts as soon as he stands on his own legs. It is not outright gift.
Kautilya arrives at a balance between the needs of the individual and those of the state. Resettlement should not be painful. Resettlement of the agrarian population was part of a major reorganisation of the rural economy. It integrated the agricultural economy with the pastoral economy and also with the industrial economy. The third depended on the first two and also on the natural resources of the forests and mountains. Factories based on mines were set up and so too industries based on timber. Water routes and land routes to the new market centres were charted. Kautilya was on the scene when economic interdependence had become inevitable and integrated janapadas were becoming the order of the day.
The state and the new rural economy
The new state was more than a predominantly agrarian janapada. State-aided village co-operatives were in charge of the steps to be taken for developing rural economy. Irrigation works were built using natural resources of water available locally or by bringing water from other places (20), that is, by constructing dams, canals and reservoirs. The state might bear the entire expenses or it might provide facilities like land, roads, trees and implements to those persons who had undertaken this task. It might also provide them with holy spots and parks (21).
Religious orders might have come forward to provide financial assistance for irrigation works. The state gave materials and ancillary facilities and also got the holy spots set up. The secular objective of the state and of the people was aided by the rich religious orders in return for material help given for establishing their holy places, temples with gardens and tanks. (This practice has been in vogue for millennia.) This mutual co-operation helped the growth of agriculture, the backbone of Indian economy. [To conceive of a secular state indifferent or antagonistic to such co-operation is unwise.]
All the families of the village participated in the co-operstive endeavour in the works initiated by the state or by these religious orders by contributing manpower to complete them. (22) If one could not contribute physical labour he was expected to send his labourers and bullocks. Many landlords required their personal servants and tenants to participate in this communal work as labourers.
The king (raja) was expected to share the expenses on the irrigation project (setu) but could not claim any benefit for himself from it (23). His personal lands would not benefit. When the villagers contributed physical labour for it, the state could not levy water-charges or increase taxes. The one-sixth rate was applicable not only to the lands already irrigated or receiving plenty of rain but also to the newly irrigated lands. Only totally non-arable lands were exempted from tax. While the state invested money, the villagers matched it with physical labour.
But it was agreed that the state would continue to enjoy the traditional riparian rights by which the king was owner of the fish, the ducks and the vegetables in the dam area and on the river and canal beds. Individuals and families might own land (bhumi) but the water sources (apa) belonged to the state as representative of the larger society. Similarly, air (vayu) and forests (vanaspati) belonged to all.
The mines, the subterranean resources were claimed by the state on behalf of the entire society. There could be no private ownership of forests, mines, rivers and even wells. This principle was in operation since the later Vedic era when the commoners came to possess private lands. During the middle Vedic era only the aristocrats had lands.
Liberation of Dasas, Bonded Labourers
The kings role in village administration was limited. He was expected to ensure that the dasas who were kept as pledges by their kinsmen obeyed their masters (2-1-25). The state would punish the disorderly among these dasas. The local body was not empowered to take action against them. The dasas were awaiting final liberation from debt bondage and restoration to their original families as free citizens, as Aryas.
The Kautilyan state was not a handmaid of the rich. The masters demanded that the advances paid by them to the debtor families who had kept some of their members as usufructory pledges should be first returned before they were freed from the contract to serve the former. This demand was not totally unreasonable. But liberation from debt bondage was painfully slow and the labourers were restless leading to angry retaliation by the masters. Kautilya allows the king to handle the situation. The kinsmen had to be coerced or assisted to pay off the debts and get the dasas discharged from bondage. (Social activists to note)
Bonded Labourers (Dasas) and Village Co-operatives
Most (but not all) bonded labourers belonged to the Shudra class. In fact, ninety percent of the population belonged to this class of workers. Later many of them ascended the social ladder and became Vaisyas, landlords. Some of the Shudras became warriors, Kshatriyas. Very few could get education and become part of the intelligentsia, Brahmans. Some of the free Shudra workers might have been made dasas by members of their own families (e.g. an younger brother becoming a dasa under the elder).
Often their services were pledged to the landlords. These dasas were asked to humbly obey the directives of their masters and help the village projects though they were justly annoyed that they were not as free as their Shudra brethren were. The directives were for a limited purpose. The dasas could not be punished for refusing to oblige their masters who had to offer physical labour in lieu of monetary and material contributions for that public cause. These co-operatives were to be free from master-servant relationship.
These organisations offered choice in the mode of contribution. Every family had to co-operate on equal footing by contributing physical labour if it was not rich enough to contribute goods to the communal endeavour.
The King and Social Welfare
The king looked after the welfare of the children, the aged and the orphans who were in distress. He was expected to protect the sonless woman (stri) and her daughters. (The son looked after his mother and his sisters in his fathers absence.) He was personally responsible for the maintenance of the helpless women (2-1-26). The elders of the village were responsible for the protection and development of the property of the minors till they came of age. They were also trustees of the property bestowed by the nobles (devadravyam, later called temple property) (27). The state could not annex these for non-payment of tax or for non-cooperation in the communal work.
The Family Court and the Head of the Family
But Kautilya does not absolve the state (king) of the responsibility for the welfare of the weaker sections of the community. Of course, the head of the family had to maintain his wife, his aged parents, younger brothers (who were yet minors), unmarried sisters, widowed sisters and his own children. He had to earn for about eight persons. (The nuclear family consisted of husband and wife, their minor sons and unmarried daughters.) If he had the means and yet failed to protect them, he was fined (twelve panas) by the family court, which the Dharmastha presided over.
Only when they had been declared as fallen (patita) and outcast by the community (for a social or sex offence) he was not required to protect them. Even then he had to protect his mother (28). Neither the village community nor the state could free him of these responsibilities.
The State and Duties of the Individual
The family was the basic socio-economic unit and it could not be allowed to disintegrate. In the absence of the earning member, the state (king) had to protect his dependants. Hence it was particular that he discharged his duties properly and did not run away (as a monk). If he abandoned his wife and children without providing for their upkeep and became a monk, he was fined (minimum 48 panas). So too, inducing a woman to become a nun was punished (29). If he pleaded inability to work, he had to get the permission of the Dharmastha to become a monk (30).
The state had the right and duty to regulate the observance of and adherence to Dharma by every individual. Though all Aryas (free citizens) had the right to Sanyasa (the fourth stage, asrama, of renunciation), it was circumscribed by the duties of the individual to his family and to the state. One who became a monk without the permission of the Dharmastha was put behind the bars. Many monks were defaulters in their economic obligations. The orders, which encouraged men in their prime to become monks, were bound to come in conflict with the economic state. [It is unsound to presume that such orders came into being only after the times of Gautama the Buddha.]
The village as an economic community
Kautilya was dealing with the village community in the pre-Prthu society and state. The scheme of four stages of life, asramas, had already come into force. The senior citizens, who had moved to their forest abodes as vanaprasthas, could enter the villages to call on their sons and daughters and kinsmen. The monks, parivrajas, could pass through a village but not stay there. They had to camp outside the village (2-1-32). There were some economic guilds (samghas), whose members did not belong to the same community (sajata) as the one to which the villagers belonged. They too had to stay outside the predominantly agrarian village. [Most villages had families belonging mostly to one native community, jati.]
Primary settlement rights and secondary domicile rights
Such guilds were not allowed to stay in the village, which guarded its jati identity. The village took the assistance of some workers co-operatives for specific time-bound ventures. They were given secondary domicile rights (upanivesa) for that duration. They were not eligible to participate in the socio-cultural activities of the local economic community (jati), which had primary settlement rights (nivesa) or to exercise franchise on par with it. (Even technologically advanced communities were thus required to be nomads. They were not tribes nor were they socially backward.) It was wise to recognise and abide by this practice and principle of village autonomy.
The village was a settled, agrarian, economic community, mostly of Shudras and Kshudrakas, tillers and peasants. The Brahmans and Vaisyas had no voice in its affairs. Many of the Kshudrakas claimed that they were Kshatriyas. Kautilya did not want it to be thrown out of gear by the entry of ascetics and other guilds of workers. He was pragmatic.
Janapada is a concept that accepts the principle of the sons of the soil being the first claimants to its resources and facilities. Rashtra today has an emotional tinge based on common will and common interests. It subordinates the state to the people, especially to the commonalty. Desa has a territorial as well as a cultural tinge based on tradition. The village was centre for agricultural production. Construction of parks and halls and centres of recreation in the village was banned (2-1-33).
Rural prosperity through hard work and Vihars
Kautilya did not want the villagers to fritter away their time and meagre income in the pursuit of pleasure and neglect their families. He warns that singers and dancers, musicians and storytellers should not be permitted to obstruct the work of the villagers (34). (This restriction was applicable to industrial centres also.) When the villagers do not provide a base for these persons and are engaged in their fields (kshetra), there will be increase in treasury (kosa), labour force (vishti), wealth (dravyam), grains (dhanya) and food-drinks (rasa). (35)
His motto was prosperity through hard work. Parasites were kept out. Was he a tough taskmaster? He closed down the vihars in villages and industrial centres. These vihars had nothing to do with religion. They were not places of worship. They were casnos.
But vihars, entertainment halls, were symbols of cultural renascence as well as of decadence. He was against the urban culture of the parasitic patriciate percolating to rural and industrial areas. He approved the measures taken in the desas, cultural regions, against vihars, as they destroyed the fruits of work (AS 8-4-21). The wealth earned and saved was being wasted in the vihars.
But as the Acharya had to admit, the Kautilyan policy of permitting the king (and the nobles) to take interest in arts and sports was beneficial as it provided employment and income to artisans, sculptors, dancers, singers etc. It is not the pleasure given but the employment generated that has to count. Kautilya distinguished between the peoples cultural centre (desavihar) and the kings entertainment centre (rajavihar).
The expenses incurred by the workers on entertainment must be very little, Kautilya insists. After refreshing themselves, they must once again attend to their work. Recreation must not prove a distraction. He was against addiction but allowed moderate indulgence in pleasure. He regulated the entry of the dancing troupes into villages. But he did not approve the king frittering away his time and wealth in vihars (casinos). For, decadent kings and their courtiers resorted to extortion of wealth from the people to meet their lust.
Kautilya did not approve opening casinos to entice the people. He did not advocate that the state should run bars, casinos and brothels. He did not want the people to be cheated of their hard-earned wealth. He appeared to be puritanical. [Some western scholars of the early 20th century and their Indian followers have deliberately given the wrong impression that Kautilya was immoral in his policy and methods and that he permitted the king to gain wealth by enticing the people to casinos and brothels.]
Confederation (Chakra) and the afflicted Region
The king should recompense the region affected by disease and famine, which followed attacks by another confederation (chakra) of states or by forest-men (2-1-36). He is advised to ban wasteful sports. The kings confederation should not leave the afflicted region to fend for itself, when the two chakras confront each other. The centre should come to the rescue of the region, which had been an independent state earlier. For, the other regions may not be willing to share in the recompensing of the afflicted area, desa.
Chakra was a political confederation. It did not lead to emotional integration among the peoples of different regions, desas. It did not lead to the concept of one nation. Every area was particular that its own needs were first met and no loss caused to it by the inability of the chakravarti to keep in bay his rival. The king should protect agriculture against excesses by policemen (danda) and his hired labourers (vishti), wild animals, crocodiles and diseases (pests).
Kautilya warns him against imposing taxes (kara) that would affect agriculture adversely. He had to protect trade routes against musclemen, workers on highways, thieves and frontier chiefs (antapalas) (38). They often stole cattle. In the integrated janapada, the king is called upon to protect forest wealth and irrigation works and mines, which are already operational and build new ones (39).
Bureau of Agriculture (Sita) (Bk.2 Ch. 24)
Agriculture, animal husbandry and trade have been the three sectors of the economy of the core society since the early Vedic times. Kautilya tried to form new Janapadas, integrating the two economies, the agro-pastoral of the core society and the industrial of the frontier society. The reorganisation was not uniform. In several areas, the earlier practices continued and the integration was still rudimentary. Kautilya was a contemporary of Bhishma and Krpa and had a definite say in the organisation of this integrated janapada during the tenure of Parikshit who took over the reins soon after the Battle of Kurukshetra.
Agriculture continued to be the basic economic sector. (It is so even now). The head of this bureau was expected to be an expert in agricultural practices, water divining and the sciences of plant life. If he was not an expert, he had to be assisted by experts in these (2-24-1). Kautilya preferred specialists with managerial skill for the posts of heads of departments, adhyakshas. The adhyaksha had to procure the seeds in the proper seasons. The bureau maintained seed farms. The state was responsible for the supply of seeds to independent farms and also to the kings personal lands, svabhumi. Seed farms were a facility provided by the king to all farmers. (But these were not a state monopoly.)
This officer was in charge of sowing and ploughing operations on the kings lands. He could for this purpose, employ servants (dasas), artisans (karmakaras) and those who were to render service in lieu of fines (danda) (2-24-2). He had to ensure that there was no delay in agricultural operations on account of lack of implements or non-availability of smiths, carpenters, basket makers etc. He was liable to pay a fine equal to the loss caused by his negligence.
[It is not correct to presume that all lands belonged to the king and that he thrived on slave labour. During the early decades of the 20th century there was deliberate misinterpretation about Kautilyan policies. The British scholars presented him as a champion of economic and political imperialism and many Indian scholars followed them. During the latter decades of that century Marxists presented him as having advocated state exploitation of the masses.] Kautilya and his team were acquainted with the quanta of rainfall and seasons of rain in different parts of the subcontinent (2-24-3 to 5). The kings personal lands (svabhumi) were spread over different regions of his empire.
Cost of Production
The director had to keep in mind the seasons for the different crops (6 to 11). Agriculture was planned and regulated though it had to depend on rains in several areas. The Bureau ensured that the dasas employed got living wages. They received twenty to twenty five percent of the grains produced by them. Labour cost less than one fourth of the market value of the agricultural produce. It did not include cost of administration and other inputs like expenses on procurement of seeds and water (2-24-16, 17).
Seeds, implements and bullocks were supplied by the government. The cost of procurement of these was evaluated at an amount equal to wages. Thus the total cost of production was not more than forty percent of the market value of the grains. It was neither high nor low. The state had to protect both the producer and the consumer from the trader.
Sharecroppers vis--vis bonded labourers as tillers
The director might engage sharecroppers, ardha-sitikas instead of bonded labourers, dasas. These were tillers who shared the produce equally with the landowners. Most Vaisya landlords must have engaged Shudra tillers on this basis. These tillers had to meet all expenses on cultivation and maintain their families within that half share. These tillers must have been only marginally better off than the labourers, dasas, employed by the department when it opted to cultivate the kings lands under its own supervision.
The half share included cost of labour computed at one-fifth of the value of the produce, cost of seeds, manure etc, hire charges on bulls and implements, token rent payable to the king as renter and surplus of the half share above these heads of expenditure. In times of distress, the king might waive the cost of seeds payable to the bureau and the hire charges (2-24-17). But the rent was not waived. It was intended to establish the kings right of ownership of the lands concerned. He did not insist on his half share when the crops failed. For then the sharecroppers too suffered. It is not sound to interpret that the king owned all the lands or that he employed slaves to cultivate the lands.
The sharecropper, ardha-sitika could sell his surplus in the market and buy his other requirements. The dasas could not get these needs met unless they cut down on their food. The sharecropper too could have employed dasas to assist him. The ardha-sitika model has persisted for several centuries and has not been harsh to the tillers.
The cost of administration must have been high in this highly bureaucratised state. The ruler had to meet it from his half share. The landlord would not have been burdened with such high cost of supervision and would have been able to make substantial gain even after paying one sixth of the produce as tax. [Many modern scholars have criticised Kautilyan Arthasastra as having adopted methods and steps that were exploitative of workers and peasants. Their remarks need to be discarded as propelled by ideological affiliations rather than by objectivity.]
Landlords vis--vis Kshudrakas
Many of the landlords belonged to the patriciate or were on its threshold. A landlord would have after meeting his sharecroppers claims and paying the tax got nearly one third of the produce as his share. This was in addition to the rent paid to him by the sharecropper. The Kshudraka who personally cultivated his small piece of land had to pay one sixth of the produce as tax and bear the expenses on hire and inputs. He could collect nearly seventy percent of the produce (though comparatively less) as his share. But the landlord who had larger holdings could earn more though it was only one third of the total produce.
The king let out his lands to sharecroppers but did not gain as much as the landlords did. Why then did the state maintain this costly department of agriculture? [State monopoly was not attempted as it was not economically advantageous or administratively feasible.]
State intervention to stabilise the market
The produce on the kings lands had to be sold at a price that would stabilise the market and prevent profiteering by private traders and ensure increasing returns to the producer. This was the raison dtre for state intervention in economy. Kautilya demanded that all goods should be brought to the market-centres for sale by auction. Sale at production-centres, of even the kings goods, was banned. The Kautilyan state through its public distribution system protected the interests of the weak. The weaker sections among the producers and consumers had to be protected against traders most of whom were profiteers (and not investors or entrepreneurs).
The market price of the grains could not have been far more than what the private producers, the farmers, demanded. The producer who invested his capital on his own land demanded a price four to five times the cost of labour when he paid wages in cash instead of in kind. [We would draw attention of the economists to this aspect. The Indian agricultural system had not undergone much change for several centuries since the Vedic times. Some modern scholars have failed to present a credible outline of this system as they have been carried away by the Marxist and colonial interpretations that it was a feudal system that thrived on rapacity rather than on sanity.]
Protection of the interests of the Agricultural Producers
All other components of the cost of protection were unreal. Land, bullocks, implements, seeds, manure, well etc. that were used were the assets of the farmer. Though he claimed that he was getting only one third of his produce as his gain after paying the taxes and wages, the farmer was in fact getting more than one half of the produce.
His servants were getting only one fifth of the produce as wages. The state was aware of this and demanded that the price that it fixed should be the norm to be followed by the traders. The latter bought the grains at this price whether from the landlords (Vaisyas) or from the farmers (Kshudrakas) or from the tenants (Vaidehakas) or from the sharecroppers (Shudras) and sold them to the non-agriculturist consumers.
If the bureau kept high its price for the royal (state) goods brought from svabhumi (the personal lands of the ruler, rajan or svami) to the market, both the labourers (dasas) and the sharecroppers (ardha-sitikas) employed by it would also benefit as their wages and value of share increased proportionately while the bureau did not sustain loss. They were the partners of the state in production. At the same time, all the producers including the agricultural labourers stood to gain. This approach treated the agricultural workers as part of the producer syntax.
The wages (which were paid in kind) kept the workers at a level above bare subsistence but lower than wasteful consumption. It was a need-based economy. It had to be planned and regulated and was not to be allowed to be at the mercy of the traders (now euphemistically called market forces). Consumerism is desire-based economy and is against Hindu ethos, which calls for overcoming desires and for fulfilling the needs of all. Needs are limited while desires have no limits. Cost of agricultural production was about forty percent of the market value of the produce. Social progress required that wages should increase in proportion to the market value of the produce.
If the wages increased while the prices plummeted, it would be dysfunctional to the economy leading to wasteful consumption. Agricultural wages have to be kept free of consumer price indices, which guide wages of other workers. Sharecroppers and agricultural workers are paid in kind as grains while other workers are paid in cash. Nearly sixty percent of the gross agricultural produce would have reached the market.
In other words, the agrarian sector had about forty percent of the population as workers, tillers, tenants, sharecroppers, peasants and landlords (dasas, shudras, vaidehakas, ardhasitikas, kshudrakas and vaisyas) and their dependants. They consumed forty percent of the gains produced. This proportion has remained almost unaltered for several centuries. (Not all who reside in rural areas are to be included in this agrarian population.) It meant that nearly sixty percent of the population of the integrated janapada stayed outside the villages and bought their grains at the market centres.
Why strict control over the market
This realisation governed Kautilyan policy and led to the tightening of the control of the state over the market. Free market means withdrawal of state protection to the weak and the destruction of the state by nullifying the raison dtre for its existence. The Kautilyan janapada was aimed at a population of about three million villagers being called upon to meet their own food requirements and those of about three hundred thousand townspeople and of about three million engaged in the organised as well as unorganised industrial and service sectors in the pastoral, forest, mountain and riverine tracts.
The state had to tackle the food needs of this frontier economy and also of the pastoral people and the urban population of the core society. Agricultural production had to be increased to meet the requirements of the entire integrated janapada. This called for more attention to irrigation. [It is regretted that the Indian scholars of the 20th century have overlooked this factor that gave direction to Kautilyan reforms.]
Irrigation and the Integrated Janapada
The landlords and the sharecroppers had to pay for the water supplied from the state-controlled water resources. As the quantum of the produce increased with more lands brought under cultivation, twenty to twenty-five percent of the value of the produce was assessed as water charges due to the state. [This is not to be viewed as anti-agriculturist. Only the beneficiaries among the producers were required to bear the cost of irrigation and they did pass on the burden to the consumers while selling the grains in the market showing this amount as part of cost production. The state was not to be punished or the non-consumers.]
Of course, for lands dependent on only rains, there would be no water charges. Peasants and share-croppers, kshudrakas and ardhasitikas, whose lands received good rains, would have been better off than those in the dry areas. Kautilya had shifted most of the villagers from the riverbanks to the interior. The state took over their lands on the riverbanks for horticulture and fish breeding. Most peasants had to depend on canals, tanks and wells and they had to pay high water charges. They could not use the waters of the streams and rivers and they protested but it was in vain.
The Bureau of Agriculture was in charge of construction of dams (setu), reservoirs, canals and tanks and transport of water to the fields. It had to recover its investment in irrigation and also meet the cost of maintenance of the irrigation network. It had to pay royalty to the residents of the forests and mountains through whose terrain the rivers flowed. Their concurrence had to be taken for the construction of dams and canals. The prescribed water charges covered this royalty also. [Many modern critics of Kautilya have overlooked this aspect.] For some lands, the water charges were minimal (2-24-18).
The agriculturist families who were shifted to newly irrigated lands had to not only pay water charges but also undergo the pangs of resettlement. [Land reforms are not new.] Land reforms led to rationalisation of the size of holdings. This must have led to near-uniform earnings for the workers, sharecroppers and small peasant and a ban on absentee landlords.
The Bureau of Agriculture discouraged cultivation of sugarcane (21) and encouraged cultivation of cotton and jute besides grains and pulses. Wetlands were not to be diverted from grains. There was a definite push to the interior and there was an attempt to bring more lands under cotton cultivation. (Economists may note.) [It is unsound to interpret this push as an attempt by Aryans to deprive the natives of their soil.] The Arthasastra cites a couplet (2-24-26), which describes how to deal with the Sarpas who posed a threat to the cultivators. They are to be smoked out by burning cottonseeds, it says.
[The Indian Indologists of the 19th and 20th centuries were carried away by the immense respect, which the western Indologists enjoyed among the officials of the British Government. They failed to question the validity of the ill-conceived and unwarranted postulates, which the so-called western Indologists who did not have a proper acquaintance with ancient Indian social polity had advanced.]
The Nagas and Sarpas were not serpents; nor were they illiterate or uncivilised tribes. They constituted the proletariat of the non-agrarian industrial economy of the forests, mountains, mines and rivers. It is not advisable to treat them as ethnically or linguistically different from the Aryas and as victims of Aryan conquest. The Sarpas (the lower ranks of this proletariat) who moved from one place to another in search of jobs blocked the felling of trees by rural entrepreneurs. The latter wanted to bring new areas under cultivation, especially for cotton. The term, sarpagraha, implies controller of sarpas, mobile forest workers and not snake-charmers. (The version sarpagraha is preferred to samahara which brings the duties of the samaharta into picture.)
The chequered move to integrate the two societies
Attempts were being made to integrate the Nagas (who were architects controlling the quarries and elephant-infested teak forests and diamond mines) and the Sarpas (who controlled the deep mines and the bamboo forests) with the core society that was engaged in agriculture, pasture and trade. The bamboo-forests were being pulled down to get houses built for the villagers and to make way for cultivation of cotton. This led to conflicts between the commoners (manushyas) and the forest workers (sarpas). These groups were to be integrated in the new economy of the reconstructed janapada on mutually acceptable terms.
The dynamics of this movement have to be appreciated in the historical context of the times of Parikshit and Janamejaya. We have to keep aside prejudices and commitments to ideologies which many recent writings on Arthasastra exhibit and discontinue adherence to invalid irrational postulates advanced by the western Indologists. Parikshit who took over power soon after the Battle of Kurukshetra violated the terms of the agreement by which the workers of the forests and mines consented to be subjects of the integrated janapada. This led to his being poisoned to death. Kashyapas disciples ended the foolish campaign of Janamejaya to exterminate the incensed Sarpas.
Both Kashyapa and Janamejaya were connected with the famous political and educational centre, Takshasila, whose architect, Takshaka (a carpenter), had killed Parikshit. Dhrtarashtra who was the overlord stationed at Hastinapura till Parikshit took over was an architect, Naga. He enjoyed the support of Kashyapa, the author of this couplet. Dhrtarashtra and Takshaka were chieftains belonging to the Naga and Sarpa industrial sector of the later Vedic society and were not serpents. Kashyapa appreciated both these chieftains.
Cultivation of cotton and denuding of forests
The Arthasastra mentions a chant that was to be recited while sowing seeds. The farmers saluted Prajapati Kashyapa and the Deva (noble) to whom they belonged and prayed to Devi Sita for the success of the sowing operations and for prosperity (2-24-27). Kashyapa was associated with Manu Vaivasvata (also known as Manu Sraddhadeva) as the head of his council of seven sages. He appreciated the performance of Prthu, the agriculturist king.
The above salutation must have become a practice in Ramas territories as in Videha to which Sita belonged. (Sita meant the furrow made by the plough. It referred to agriculture in general.) Were the forests of the peninsula felled down and brought under cotton cultivation? (Nala-Damayanti episode of this period involved burning of forests and resistance by the enraged sarpas. The two had to flee almost naked, and charred. Damayanti was a princess of Vidarbha while Nala was a former serf of the prince of Sindhudvipa.) Development, extension and diversification of agriculture led to denuding of forests, affecting their dwellers and the miners adversely. There would have been a setback to mining but housing and textiles benefited.
Wages in cash and kind
The Bureau of Agriculture (sita) regulated the wages of the workers (dasas and karmakaras, servants and artisans) employed in the kings lands and of the gardeners and cowherds who looked after the cows under his protection. The food requirements of their families were met in kind. In addition, every employee was paid the minimum wage of a pana and a quarter per month (2-24-28). This met some of their other needs. The artisans employed for specific work were paid wages in cash in conformity with their work (29). The state ensured more than subsistence wages for all the agriculturist families and those who rendered tertiary services, as far as the state sector was concerned. Kautilya wanted a strong state and an honest bureaucracy. There was exploitation of the workers when the state was weak and the bureaucracy was corrupt.
The other duties of the chief of the Bureau of Agriculture
The srotriyas, Vedic scholars, and the tapasvis, the scholars who were engaged in strenuous endeavour to create or discover new things and ideas stayed outside the agricultural village. They were free to gather flowers and fruits that had fallen from the trees, if they were engaged in devakaryam, that is, in projects sanctioned by the house of nobles. [Devakaryam has later come to be interpreted as worship of god.] (24-30)
The grains left behind on the ground after gleaning could be taken by the priests engaged for the agrayana services to be performed after harvest. The harvested grains were to be brought to the threshing floor at the proper time. Nothing was to be left behind on the fields. The granaries had to be tall and airy. The grains were to be protected against depredation and deterioration and against accidental fire (31). This bureau looked after agriculture, horticulture, floriculture and orchards. But it was not connected with the marketing of the produce. It controlled agriculture in general and the kings personal lands in particular. It is wrong to presume that the king owned all the lands in his kingdom.
Bureau of Yarns (Sutra) (Bk.2.Ch.23): Women as Spinners
This bureau was in charge of transactions (vyavahara) in yarn. Cotton was being cultivated mainly in the private sector. The bureau employed experts in yarn, protective cover (varma), clothes (vastra) and rope (rajju) (2-23-1). The department of agriculture controlled cultivation of cotton.
The bureau of yarns controlled spinning and weaving. Spinning industry employed women, mainly widows, spinsters, nuns and crippled women and those who had to render service in lieu of fine (2). It also provided rehabilitation to the mothers of courtesans, the elderly women servants (dasis) of the king and the freed women employees of the nobles (devadasis).
Kautilya undertook the major step of liberation of dasas and dasis. This bureau was in charge of a major social welfare programme. It bought and marketed the yarn and clothes produced by these women. Spinning was left to the cottage industry, particularly to needy women. Married women who were in charge of their households were not drafted. It was not treated as an additional source of income for the family. The husbands earned for themselves, their wives and children and for their aged parents. But their earnings were not adequate to protect their dependants like their widowed sisters and daughters and unmarried sisters.
Spinning came to the aid of such dependants. [Spinning was not a vocation confined to a particular community.] The wages of the spinners were based on the quantity and quality of the yarn spun by them (3). For work done on festive days they were paid gifts and honoraria in addition to wages. The rule was Pay according to work, and no work, no pay. Spinning was a social welfare and cottage industry and there had to be no exploitation of the helplessness of the needy women. It did not admit even needy men. Spinning and weaving needed the soft touch of the fingers of women.
Weavers as artisans
Weavers were however treated on par with artisans and independent workers. They were to be paid on the basis of output and time consumed. The head of the bureau kept close contact with them. But he was not expected to supervise their work (2-23-7). Artisans were to be recruited for spinning and weaving in the new factories.
[This and several other statements in the Arthasastra are bound to throw up the doubt that as in the case of Manusmrti, Kautilyan Arthasastra too was doctored by the British colonial rulers of India. They tried to justify the measures being taken by them as being in tune with the economic policy adopted by the ancient politico-economic thinkers like Kautilya.]
The village homes were not to become textile production centres. Looms were not to be put up at the residences of the farmers who constituted almost the entire population of the village. Weavers hence had to keep away from villages and later drifted away from the culture of the farmers. But spinners were part of the village.
Physical Distance and Social Distance
The concept of self-sufficient villages with diverse occupations was not found to be a feasible proposition or to be advantageous. The industrial sector proper (whether heavy or light or soft) was removed from the villages. The different sectors of the economy had to stay apart from one another though they were inter-dependent. This physical distance led to formation of exclusive communities (jatis) and to enhanced social distance among them. [We would hold that this distance was further increased with the industrial policy adopted by the British and other western imperialists in their colonies. It was a negation of the call for social integration effected by Krshna, Kashyapa, Kautilya and other thinkers.]
The communities developed their distinct practices, acharas, in due course of time. There were factories using deerskin and wool. The workers joining them were welcomed with honour due to guests (8). This bureau was in charge of manufacture of different types of cloth, carpets and covers (9). The wages of these new workers must have been attractive. They catered to the needs of the elite.
Protection for women workers
Kautilya felt it necessary to meet the need for jobs of those women, who could not move out of their houses (e.g. widows, spinsters, divorcees and the crippled).They needed protection against molestation and exploitation. They were not to be enrolled in the new factories, which had both spindles and looms.Kautilya asks the chief of the bureau to send his own women servants to the houses of these women employees to assist them in preparing the desired type of cloth and for handing over to them cotton and yarn.
Kautilya shifted the textile industry from the towns and villages to the newly set up industrial complexes at Karvatika centres. But the domestic handloom industry was not totally dismantled.It was reserved for women who were socially or physically handicapped.
The men weavers and spinners were required to enrol themselves in the new factories. Women too could be employed there but were to be given special protection.They were allowed to work at home after receiving the raw materials (cotton or yarn) from the officials of the factory and return the finished product.These transactions took place in the morning, after sunrise.The head of the bureau was asked to ensure that his officials did not tease or molest or harass or entice these women(11 to 13).The guilty was liable to be fined(minimum eight panas).For delay in payment of wages and for payment made for work not done, the penalty was high (14).These textile factories were under state control. Only the domestic spindles and looms were under private ownership.
Textiles as a social welfare industry
It was a social welfare industry and not dole. Nor was it exploitation of needy women.It was an industry set up to assist them to earn their livelihood honourably.It gave refuge to many freed prostitutes.The woman spinner who received advance wages but failed to hand over the yarn spun was liable to lose her finger-spindle (given free by the department). The spindles would be withdrawn from those guilty of misappropriation or theft and those guilty of absconding from duty.Rehabilitation of women who had taken to theft or prostitution or vagrancy required strict vigilance to avoid relapse into vices and crime.Control over cottage workers was weak. However factories were under strict supervision (16).
Rope making was supervised directly by the chief of the bureau. He employed tougher men (17).During the VedicNagas and they controlled jute, flax and coir industries while the Sarpas controlled cotton and wool, spinning and weaving.The Nagas belonged to the frontier economy and were connected with navigation and transport also.This bureau was in charge also of manufacture of bands and straps needed by the troops and by the cart-drivers (19).It supervised manufacture of protective leather covers (varma).These workers had no place in the agrarian village. times they were known as
Bureau of Animal Husbandry and Cow-protection (Bk.2-Ch.29)
This bureau was required to follow the rules prescribed with respect to(1) payment to the cowherd in return for maintenance of the kings cattle, (2) tax on milk produced by private cattle-owners, and (3) share due to the citizens who kept their cattle under state protection and allowed the king to enjoy usufructory benefits.The bureau had to (4) maintain records pertaining to the number and types of animals admitted to the state cattle pens, the number lost and the number perished with reasons thereof, (5) disposal of useless cattle and (6) production of milk and ghee. (2-29-1)
The state played a significant and pragmatic role in protection of cattle. It was not guided by sentiments.The cowherd, the milkman, the churner and also the gatherer of stray cattle who were employed by the bureau were paid wages in (gold) coins. They enjoyed more respect than the ordinary tillers and peasants.Each cowherd was in charge of a hundred cows and buffaloes (2-29-2). But the cowherds were not allowed any share in the milk lest greed should make them neglect the calves (3). The sharecropper policy adopted in agriculture helped to increase production of grains but it was dysfunctional in animal husbandry.
Each herd of hundred cows included equally aged cows and milk-cows with calves and also cows weaning calves(4). Cow-protection included prevention of cow-slaughter. Cow-slaughter, incitement to it, stealing cows and instigation to steal cows invited death penalty.The cattle-owner had to pay eight varakas of ghee and one pana per cow per year as tax (5). He had to pay ghee worth eight gold coins and one hundred silver panasThe gross income on a herd was assessed at ten times the tax levied.
The owner would have been selling milk and ghee to purchase grains etc. for his family. He was free to sell the hide of the deceased cattle.The state took precaution against both wanton and surreptitious cow-slaughter.Yet this permission might have been misused.The cowherd could cast off the diseased and crippled cows and also those cows, which harmed their calves(6). Perhaps they were siphoned off to the abattoirs. (16) as tax for a herd of one hundred cows of which less than half yielded milk.
Many owners sought refuge for their cattle in state pens during invasion by enemies or by forest tribes. They had to pay one tenth of the milk as charges under the code of protection (palana-dharma)(7). It was in addition to the above tax.The bureau kept a register of such cattle under its protection. It was intended to prevent surreptitious sale of cows by corrupt officials (8 to 11). The official had to make good the loss caused by his negligence. (The state had to pay compensation to the citizen who had trusted it with the cattle) Any employee who tried to replace the kings cattle (which had special markings and which would have been of high breed) with other cattle was punished (minimum eight panas )(17).The cattle (belonging to the country) recovered from thieves were returned to the owners (18).
One who recovered the cattle of another country would get half of them as his share (19). He should hand over the rest to the state.A cowherd employed by the state had to pay the cost of the animal lost if he failed to report the loss.The cowherds and those in charge of domestic animals (goats, sheep, horses, donkeys and camels) could sell the flesh of the dead animals but should hand over the hides and the bones to the bureau (26). Cow-slaughter was banned. Eating beef was a different issue! (This concession must have been a later interpolation.)
Bureau of Pasture Lands and Open Lands (Bk.2 Ch.34)
The village and its agricultural lands were open only to those peasants who were assigned to them. The population of the village was not cosmopolitan. It was insulated against social and cultural influences that other vocational communities and groups could have exercised if free social mobility had become a necessity and been hence resorted to.Interactions between different economic groups took place only at the market centres and they were not too friendly. The agrarian community became increasingly isolated from non-agrarian communities even as it was protected against the machinations of traders.
Endogamy led to strengthening community ties created by common economic occupations and interests. Every group of ten to twenty villages (samgrahana) had a particular dominant Shudra community, born there. The few Brahman priests, Vaisya traders and Kshatriya officials had to seek marital alliances with their clansmen spread over the district (pradesa) and even beyond it, rather than stay confined to the cluster of villages and its neighbourhood. For, their numbers in the cluster were not adequate to prevent too close an endogamy that would lead to unhealthy inbreeding.
The village was surrounded by a small stretch of pastoral land, which was assigned to specific cattle owners or cowherds appointed by the state (janapada).Others needed passports(mudra)to enter it (2-34-3). Trespassers were fined. Aliens were punished more severely. Only authorised persons from even the neighbouring villages could enter the earmarked tract(6).
The cattle owners enjoyed territorial and social autonomy and they guarded their rights jealously. Some of these lands might have been full of shrubs and wild trees and some were low-lying marshy areas.They were hideouts for robbers and were infested by wild animals.The bureau was required to cut down the shrubs and level the lands (7). Of course, these lands could not be converted into agricultural lands.They belonged to the state and not to the cattle owners or to the cowherds. The bureau provided them with wells and springs and brought them under fruit and flower cultivation(8).Ascetics (parivrajas) set up their abodes in these retrieved lands.
Despite this deforestation of the periphery to facilitate pasture, the lands were kept green. Ecological equations were not disturbed. The bureau was also in charge of trapping animals and catching birds. The trappers and hunters would have had their residences near the retrieved lands (and not in the agricultural villages) or inside the nearby forests.This physical distance would have led to social distance between the vegetarian villagers and these trappers and hunters who catered to meat-eaters. Incidentally, the permission given for hunting wild animals helped to protect cows and men.
These trappers were recognised as citizens of the janapada and were required to alert the king (raja) through the officer in charge of this bureau about the movements of the forest-men and unfriendly persons (9 to 11).
The bureau ensured that the workers who were dependent on forest-produce and working inside the forest got whatever they needed for their livelihood (12). It looked after tanners and guardians of elephants. Forests were pushed back and safe zones were created between the former and the agrarian villages. The residents of the forests did not need to go to the villages and they were not welcome there.This bureau was also in charge of the state highways and it ensured the safety of the cattle, the caravans and the traders using them. It also prevented transport of illicit goods (12).
KAUTILYAN REFORMS AND
INDUSTRIES AND COMMERCE
Forest Resources: Kupya (Bk. 2 Ch. 17)
Forest wealth is not to be exploited indiscriminately. Its main enemies were not agriculturists or cattle grazers but the forest dwellers themselves. The chief of this bureau directed the forest guards to ensure that the produce was brought to the forest store. The forest wealth (dravya) was not to be consumed by the dwellers or by the workers or sold to traders directly (17-1).
The state controlled the trade in forest produce even as grains could not be bought directly by the traders from the villagers and were brought to the central warehouse (koshtagara) from where it was released for sale at the appropriate time through auction at the market place.The officer in charge of the forest store was also required to erect workshops, which utilised the forest resources (dravya-vana karmanta) (2). He fixed the amounts due from the woodcutters and also prescribed the penalty for violation of the rules. This penalty could be waived in times of distress.There was no resort to slave labour or exploitation of forest workers. [Some Marxist scholars have been unduly eager to establish that Kautilyan state and economy thrived on bonded labour.]
Duties of the forest officerflora and fauna
The trees belonged to the forest dwellers and the state purchased the timber it needed from them.There was state monopoly in purchase of forest wealth They could not sell timber or other forest produce secretly to others or refuse to sell them to the state. (3).The Arthasastra lists the different species of reeds, creepers, fibre-plants, plants useful for making ropes, trees, leaves, flowers, herbs, poisons and serpents, insects and animals whose skin and other parts were treated as forest wealth for this purpose. Several industries used these as their raw materials.These had to be brought to the forest store as requisitioned by the officer.[It is not to be concluded that he was engaged in looting the forest wealth on behalf of the state.] He was expected to prevent misuse and misappropriation and greedy exploitation of the forest resources.
Storing metal goods
The forest officer was in charge of storing the metal articles that were manufactured by the forest dwellers and others in the forest factories.[Kautilya did not favour locating industrial units in the midst of the agro-pastoral hinterland. Only the new textile centres which depended on cotton grown on the deforested lands and units producing vegetable oil were situated in these tracts.] The metal goods were made of copper, steel, bronze, iron, tin and vaikrntaka (zinc?)(14).
[Kautilyan Arthasastra belonged to a period coeval with the early Savarni Manus when India had already mastered the technology behind manufacture of these metals and alloys] He was expected to erect the workshops,ensure their safety and provide the infrastructure and store the raw materials and the finished products.
He was however not in charge of manufacture of metal goods.Manufacture was left to private entrepreneurs who invested the capital and had the needed expertise (which knowledge they kept as their professional secret).These manufacturers could not market their products directly.They had to deposit them in the forest store.The state determined when they were to be released for sale.The state was not the producer nor was it consumer of these products. It did not trade in these goods.The producer too was not a trader.
Workshops moved to forests
Charcoal, husk and ashes were not to be left behind in the mines or in the workshops. They had to be deposited in the forest store (15).They too were useful. Besides, accidental fire had to be prevented and controlled.Most units were moved from place to place, as they were dependent on timber for fuel.The bureau provided storage facilities for vessels made of split bamboo and also of clay and for grass and fuel (17).The workshops might be located deep inside the forest or just on the outskirts of towns. The bureau was also in charge of parks and sanctuaries meant for deer, cattle, bird and wild animals. This must have checked poaching (16).
The forest products were meant mainly for the rich urban consumers.The villagers cultivated their lands, used clay vessels and lived in mud houses and produced the cloth needed. They could buy their other requirements by selling off their surplus grains at the market centres.They would have only marginally depended on wood for fuel.But the citizens, paura, used carts and chariots and lived in houses, which had stone and brick foundation and wooden superstructure.
Vehicles could be made(by rathakaras) only in the workshops located near or inside the forest. There could be no timber depots or workshops inside the towns. All metal goods had to be imported from the workshops situated inside the forests,which enveloped the mines and ores. Kautilya had shifted all workshops and markets from the towns and kept them as administrative centres. This was a major reform,which most of the modern scholars have failed to note.Archaeologists may take note of this aspect.
Bureau of Ores, Mineral Sources (Akara) (Bk. 2. Ch.12)
New and old mines
The chief of this bureau was expected to be an expert in geology and metallurgy (2-12-1).He had to know the arts of smelting (rasapaka) and of purifying gems (maniraga).If he was but a bureaucrat and not an expert, he was to be assisted by a team of experts in these fields. As in agriculture, in industries too, administration was to be controlled by technocrats and not by bureaucrats of the general category.
Mining was not new. The officer was asked to survey the old mines and locate new ones with the help of workmen who had proper equipment. The marks of dross, crucibles and ash left behind by earlier miners (who operated mainly open pits)would help them to locate the old mines, abandoned without full exploration and exploitation.The pioneers and entrepreneurs (whether in agriculture or in mining) shifted the places of their operation too rapidly and were adventurous by temperament and nomads by nature and also by necessity. New expertise and new implements helped to reopen the old mines. Deep mining had become feasible.
Meantime, there was a temporary setback to mining and industry in general for want of capital, expertise and implements.[The state policy advocated by Usanas had banned private enterprise in mining. The state claimed monopoly over all mines and over all subterranean resources including water. Kautilya amended this policy.] The reader is cautioned against the assumption that the agrarian settlements came into existence at a very late stage and that the earliest peoples were nomads and hunters. Such simplistic versions of epochs are misleading.Social and economic progress has been marked by the practice of two steps forward and one step backward. Conquest of nature was not easy.
New mines were opened for tapping resources at all levels, surface (bhumi), rocks (prastara) and streams underneath (rasadhatu).The potential of these mines had to be assessed through their marked colours (athyantavarnam), their prestige (gauravam), stench (ugragandha) and flow (rasam).It was still an age of empiricism. The age of experimental science had not yet set in..Kautilya prepared the ground for it but it had to await more findings and facilities.Kautilyas times were coeval with the events that led to the Battle of Kurukshetra c.3100 BC. and not as late as 300 BC.
Of importance is the new push towards technologically important ores and mining.Of course, the earlier practice of surface level exploration for costly gems and diamonds continued.The Arthasastra describes how to locate gold, silver, copper and bitumen with reference to subterranean metallic streams (2 to 4) and how to operate the quarries (5, 6) and surface level mines for gold, copper and silver.The metal content is much in the heavy ores, as the expert is briefed. He is told how to soften them and extract these metals (7 to 12). He is also told how to locate lead, tin, iron and vaikrntaka (zinc?) (13 to 16)and identify gem ores (17).Empiricism dominates.
Mining and Trade in Ores and Minerals
The purified ores had to be deposited in the forest store from where they were issued to the manufacturers of metal ware. There could be no sale of ores at the mines and there could be no factories near them.Trade in ores was centralised and so too trade in industrial products was centralised (ekamukham). Manufacture, sale and purchase outside the prescribed areas were banned.Mines belonged to the state but mining operations were in the private sector. The licensee had to invest capital and employ the necessary skilled and unskilled labour. But he had to hand over all the purified ore to the bureau.A miner who deceived it was fined eight times the value of the stolen ore (20). It was to be entrepreneurship and not fortune-hunting.
Death penalty was imposed for theft of costly gems (4-9-3). The thief and the unlicensed miner were forced to work without wages, if they were unable to pay the heavy fine (21). Mining was a major source of income to the state.The bureau itself operated the easier mines.But the difficult and more expensive ones were leased out to private entrepreneurs or were operated jointly. The Kautilyan state was pragmatic.In theory, the state owned all mines. No individual or company could be owner of mines. Mining was mixed economy controlled by the state.
Bureau of Metals (Loha) (Bk.2 Ch.12)
Manufacture of metal articles was in the private sector. But the workshops and the infrastructure were provided by the state. The chief of the bureau of metals (lohadhyaksha) oversaw the operations of these factories (23).The operator of the workshop had to hand over all the metal articles produced by it to the chief of this bureau. He received the raw materials required by him from the officer in charge of the forest store. He could not buy them in the open market or directly from the miners. He could not sell the metal goods directly to the consumer. He was a producer and not a trader.The state intervened at every stage to regulate the economy and to prevent profiteering by the producer at the expense of the consumer and the state.
The Economic State and Manufacture of Industrial Goods
It was an economic state responsive to the expectations of and responsible for the welfare of the people. It was not at the mercy of what today is called market economy a euphemism for speculative economy, which thrives on the illusion of enlightened consumer choice, which in fact is deception of the nave consumer.The state owned the mines and the workshops though they were leased out to the operators. It controlled the sale and purchase of the raw materials and also of the finished goods.
The operators could produce only what the state indented. It provided the infrastructure and even the expertise, if possible. It planned what had to be produced and allowed the operators to execute the plan. It intervened when necessary to protect the interests of the producers and the consumers. It was not at the mercy of the investor or the worker or the trader
This policy helped the state to uphold its sovereignty (svamitva) and to perform its role as a social welfare state working for all-round development and progress. Kautilya was pragmatic.(Note the strategic but limited role played by his state.)
Master of the Mint (Lakshana Adhyaksha) (Bk.2 Ch.12)
Silver coins valued at one pana, half a pana, a quarter pana and one-eighth pana were in circulation. [This tradition must have been older than what scholars in numismatics acknowledge. It has persisted despite alien rule for nearly a millennium. The silver pana with the state emblem and perhaps the profile of the ruler or a deity later came to be called a rupika or rupee.] One-sixteenth of a pana was called a mashaka. It was made of copper.Coins of still lower value were called kakani. They were made of black lead. Minting of state currency was centralised and was under this officer(24). Gold coins (varaka or suvarna) were minted but were not in circulation.They were kept in the treasury for interstate purposes.[Was this practice in vogue only during the times of Vishnugupta and Chandragupta Maurya or was it so also in the earlier times of Kautilya and Parikshit?]
Currency (Panayatra) (Bk.2 Ch.12)
The examiner of coins (rupadarsaka) was in charge of regulating the circulation of coins (panayatra) for trade purposes (vyavahara) and for receiving them in the treasury (25). Economic disputes that were justiciable in a court of law were known as vyavahara. The economic or monetary transactions that were not entertained by the court were known as panya.
There was a standard currency known as karshapana. The traders might have brought in foreign coins or coins issued by autonomous trade organisations like the srenis or by regional (pradesa) administrations.Their values had to be ascertained in terms of the central currency.While exchanging them for central currency or depositing them in the treasury, a conversion charge of eight percent was levied to meet the expenses of the mint.Most of these autonomous bodies must have minted coins of nearly the same value as the central currency and only the emblems needed alteration.
Currency and the federal structure
108 local panas were equal to 100 central panas. This exchange rate has become part of the Indian trade practice. An additional surcharge (vyaji) of five percent was levied to make up the possible difference (in proportion of silver and copper). The department of trade (panya) appropriated this surcharge to meet its expenses. Karshapana was valued at a pana and a quarter.This would have benefited the treasury by about twelve percent.
Kautilyan Arthasastra gave the central government the authority to mint its coins, to examine and accept foreign and local currencies. The regions were not debarred from minting their own coins. The introduction of a central currency did not erode their autonomy. The centre and the regions both had their own currencies. This system became permanent and led to the resilience of the Indian currency and Indian economy despite the periodical withering of the central authority.
Traders were liable to be fined twenty-five panas (per hundred) for violation of currency rules.Where coins were paid in local currencies without going through the procedure, a pana and a quarter of the local currency would be equal to one pana as approved by the central government.(Only weight was taken into account.) Private traders had to get their foreign or regional currency exchanged at the state counters as they entered the market-zones where only the state currency was the legal one.The market was not allowed to determine the value of the currency. This check was necessary to prevent circulation of bad coins (26). The stage of barter trade had been tided over long before the times of Kautilya who himself belonged to the final decades of the Vedic era.It was possible to introduce the central currency system and to succeed in regulating the economy because the state controlled all mines.
The department of ores (kani) was a subsidiary of the department of mines. It handled costly ores, which did not involve deep mining. Conch-shells, pearls, corals, diamonds, gems and kshara (molasses?) were processed at the workshops set up by it. Its chief was empowered to regulate the sale and purchase of the processed ores.These were not industrial ores.The consumers were from the upper classes.The jewellers (other than goldsmiths) must have got their raw materials through this department.The state bureaucracy tried to ensure that the producer-trader nexus did not harm the interests of the state and the consumers.The state had to control access to natural resources. (2-12-27)
Department of Salt (Lavana) (Bk. 2 Ch.12)
The central government regulated the activities in salt mines, in salt lakes and in the salty sea. Purifying and crystallizing salt at the proper time was regulated by the state. It intervened in the manufacture and sale of salt, an essential item. The state owned all the salt mines. The salt commissioner fixed the lease amounts, rent, price of salt, inspection charges and surcharge (28). The lessee had to give to the state the prescribed share.
Most of the janapadas were in the interior and had to import salt from the coastal districts.Very few were dependent on salt lakes and wells.Imported salt was taxed at one-sixth of the cost of production (29). [Salt was not free from tax. Was this an interpolation effected during the British rule in an effort to assure Indians that their traditional practices were continued?] A five percent surcharge (vyaji) and eight percent mint charges for exchange of currency were payable to the state (30) when the tax was paid in another currency.Tolls were levied on imported salt.
The importer had to bear the loss caused to the state commodities of trade (rajapanya). Disputes on these could not be taken to the court for justice(31). Imports were made costly.Local produce was kept cheaper and given protection, especially in essential items like salt.Foreign goods cost thirty percent more than local goods. Protectionism is natural and is needed in the interests of the consumers, that is, of the masses. Salt too was covered by this principle. Adulteration of salt invited severe punishment.Only vanaprasthas were allowed to dry up brine and prepare their own salt.They were neither buyers nor sellers of salt. Vedic scholars and hermits were free to take salt from the state go-downs. All other buyers of salt had to pay tolls.
State and Mines
The Bureau of Mines determined the cost of production (mulyam) and the share (bhagam)due to the state.The state claimed one-tenth of the produce where it had not invested capital and up to half the produce where it invested capital and provided the necessary infrastructure also (as in the ardha-sitika pattern in agriculture). Srenis or corporations and private entrepreneurs invested their own capital and engaged their own labourers. Samghas or workers guilds were like ardha-sitikas. They lacked capital but had the necessary expertise.
The bureau fixed surcharge (vyaji),monopoly tax (paridham),penalty (danda) ,tolls (sulka), compensation (vaidharanam), coin charge (rupa) and mint charge (rupikam) (35). The officials of the bureau had to submit accounts under these different heads while handing over the products to the concerned authorities.
Twelve varieties, six of ore (kani) (and six of metals dhatu) were brought under state monopoly.[The operators were however private investors.] Conch, diamonds, gems, pearls, coral and kshara (?) were the six ores and gold, silver, copper, tin, bitumen and vaikrntaka (?) were the six metals.[Iron and steel, brass and bronze were not under state monopoly, it may be inferred. It is more likely that when Kautilyan Arthasastra was first drafted these were not in vogue.] The rules governing trade in these twelve items came within the framework ofpanya (and not of vyavahara) and disputes on these were not justiciable in court. These rules were intended to protect these ores and costly metals from the vagaries of the market (36).
Importance of Mines for Political Power
Mines (akara) enriched (prabhava) the treasury (kosa). They were the main sources of central revenue, not the taxes, which were meant to meet the expenditure on protection (raksha) of property and life and on administration (paripalana). Political power (danda) emanates (prajaya) from the treasury (kosa), Kautilya points out. Political and military power depends on the economic power of the state. A weak economy will lead to a weak army and poor administration.Gaining of economic and political power is possible only with control over mines, the basis of industrial economy.
The state has to own the mines, not only of costly ores and metals, but also of iron, lead etc. and regulate and control their operations. Prthvi, the social world of agro-pastoral commonalty engaged in economic activities (vrtti), is acquired through economic power (kosa) and military power (danda) (37). No government can afford to overlook this dictum. [It is not sound to interpret that prthvi means the entire world.] The army alone is not adequate to gain control over the entire inhabited country (prthvi).The prestige of a country and its ruler depended on its treasury. Hence the state monopolised the mines, the most important of the non-renewable natural resources.
Warehouse (Koshtagraha) (Bk.2 Ch.15)
The central warehouse was intended to stabilise the market in addition to meeting the needs of the officials and the army. This bureau had to maintain records of grains etc. under different heads(2-15-1 to 11). What was produced on the kings lands (svabhumi) and sent to the warehouse by the bureau of agriculture constituted a major portion of its receipt(2). An equally important source was the rural hinterland, rashtra. Its independent peasants contributed grains under various heads.This analysis pertains to the times when the rural areas were referred to as rashtra and the concept, janapada, had not replaced it.
Tax in kind
Collections from the rural hinteland, rashtra,were classified in four categories, pindakara, shadbhaga, senabhaktam and bali. Since very early times the people paid a tax in the form of voluntary sacrifice (yajna),to indicate their indebtedness to the ruling elite (devas) and their ancestors(pitrs).It was known as pindakara. A fistful of rice was given away every day. It was collected and sent to the warehouse.
One-sixth of the grains produced by the peasants belonged to the state as its share. It was called shadbhaga. The local officials collected this share (later called, kara), soon after the harvest and sent it to the warehouse. Agriculturists and others who used the services of the troops to protect their property were required to make contributions in return.This was known as wages for troops, senabhaktam.[The Vaivasvata state withdrew this tax, as shadbhaga covered protection money.]
In some areas the practice of paying tribute, bali,persisted.It was banned after Vamana exiled the feudal overlord, Bali, and replaced bali by kara.(Incidentally after Bali vacated Janasthana it was occupied by Kara, Ravanas general.) It is not to be presumed that every peasant had to pay all these types of agricultural taxes. The four types were in vogue separately in different parts of the mega-state.
Kautilya, following the provisions of the Vaivasvata constitution made shadbhaga the common pattern of tax to be paid by all who sought state protection for their lives, property and economic activities. Only those persons who paid taxes were given political franchise.
Kara, tax, was a token amount collected from all landlords and even sharecroppers working on the kings lands. It could not be waived even in times of distress. It was intended to assert the kings sovereignty over the land. The minor heads were known as utsanga(a lap, a little more than the amount due that the taxpayer was induced to part with) and parsva (the first handful).Some amount was collected for loss in transport etc. The officers had to account for these.Agriculturists who wanted space to store their grains in the warehouse had to pay storage charge (koshtyaka)(3).
Duties of the Chief of the Warehouse
The chief of this bureau fixed the purchase price of the grains. He looked after the disposal of the stocks, recovered the loans given, maintained records of stocks borrowed from others and stocks returned. He was in charge of barter trade in grains. He fixed the wages of the workers employed to pound grains, to split pulses, to fry, to ferment, to grind, to press for oil and to extractkshara (8). Some farmers might have provided the services of their own employees in lieu of taxes. He had to keep records of their services and also of compensation collected for loss in the above operations.
There were losses during distribution (vikshepa) of goods and also on account of diseases to the grains after they had reached the warehouse.He had to note these as written off and show the balance on hand.Differences on account of weights and measures, hand filling, husk left behind, surcharge for services rendered etc. had to be recorded. The recoveries effected were to be kept on record.
The different types of grains, pulses etc. kept in the warehouse and the proportions are specified in the records(12 to 49).The requirements of the animals maintained by the state are then listed.Charcoal and husk were to be sent to the smithies to be used for plastering walls (60). Broken grains were given to servants (dasas) as wages and to broth-makers. Other items should be sold to the hotels (61). The bureau maintained records of different types of tools needed and categories of employees using them. How to store the goods is described in (64). Bureaucracy could not bypass the rules and regulations prescribed.
Directorate of Trade (Panya) (Bk.2 Ch.16)
Traditional science of occupations(varta) (outlined by Brhaspati) dealt with agriculture, animal husbandry and trade (vanijya).Industrial economy was being looked after by the frontier society of the forests and mountains.Kautilya brought it under the jurisdiction of the enlarged janapada. The mines occupied a crucial place in the integrated economy.
Arthasastra divides vanijya into two sections, panya and vyavahara. All property deals are governed by civil law (vyavahara) and are justiciable in a court of law. All cash transactions are governed by money (panya) and are based on bargain and on demand and supply. They are not justiciable in court.Vyavahara covers rights of ownership and succession, deposits and pledges.Trade proper, Panya, was under a separate bureau.
Vikshepa and Samkshepa; Distribution and Stocking
The director of this bureau(of panya) was expected to be conversant with the prices of different commodities and of different qualities and the demand or absence of it for these and whether they arrived at the market by water route or by land route. He determined the proper time for distribution (vikshepa) of a commodity and that for withdrawing it from the market and stocking it (samkshepa). He was expected to be fully conversant with the demand and supply mechanism. He was in charge of control over purchase and sale of all consumer goods.
He controlled the marketing of grains, pulses, oils etc. stocked in the warehouse and of the goods in the forest go-down. Any given commodity is available in abundance and is hence cheap only at a particular time of the year.The state intervened to purchase it then and store it and raise its price(2-16-2). It was not an attempt by the state to deceive the producer or the consumer. It was intended to prevent distress sale by the producers, especially of perishable goods.True, the state stood to gain.
But its object was to halt the bearish trend, which harmed the producers and benefited only the private stockists. The state prevented the unscrupulous wholesalers from making profit at the cost of the producers and the consumers, as well. It controlled the economy and did not allow the big merchants to overwhelm it. As the market stabilised at the price offered by the state to the producers and the wholesalers agreed to pay the same price and there was no danger of the traders colluding to the disadvantage of the state and the producers, the directorate offered a higher price for the commodity (3). The state protected the producers and the consumers against manoeuvres by traders.
State Trade (Rajapanya) (Bk.2 Ch.16)
Trade in state goods (rajapanya), which were produced on the rulers personal lands (svabhumi) was centralised (ekamukham) by civil law (vyavahara) while trade in goods produced on the lands of others (parabhumi) was decentralised (anekamukham) (2-16-4). Law prohibited the traders from competing with the state (king) as far as the state goods were concerned. (Economists may note.)It also called for competition among traders with respect to other goods. 'Parabhumi' included the lands of the private citizens within the country and also the lands in the countries of other rulers whether they were sovereign rulers or were his vassals. A correct appreciation of this policy is called for.
While keeping down the consumer prices, it protected the interests of the state. It prevented formation of cartels and monopoly tactics by traders. The intention was to benefit the consumers. The state did not monopolise trade in consumer goods and neither did it withdraw from the market.The state produce, the share of the state in private produce and the produce purchased by the state were intended to keep the consumer price in check, but without loss to the state. The state permitted private trade but not monopoly in trade.It was not a helpless bystander or a tool in the hands of the traders.
State not a profiteer
The traders had to keep the prices down. They were prevented from creating scarcity even as they were prevented from forcing the producers to resort to distress sale. The state sold its goods at concessional rates despite the huge expenditure incurred by its bureaucratic machinery. It was not a profiteer. This policy intended to benefit the subjects (prajas) by selling the state goods at concessional rates (ubhayam) and by promoting competition among traders.[This has been the traditional policy of social welfare states.]
The denial to the state of the right to extend support to the producers and concessions to the consumers and its yielding to the assertion by the traders of their right to determine market trends without state intervention would have been a challenge to the sovereignty of the state and been against the principles and science of political economy, Arthasastra. It is equal to asking the state to commit harakiri. The Kautilyan economic state did not yield to the machinations of the mercantile class.It stood by the producers and the consumers. It bore the expenditure on bureaucracy and did not pass it on to the consumer.
State as regulator of consumer prices
The price offered to the producer was stated to be the consumer price as far as the state produce was concerned (5).The sharecropper was a co-producer. There was a similar practice in industries too. The state, as a trader, followed the no profit, no loss policy. Of course, the private traders must have resented it.The Kautilyan economic state was a social welfare state and not a capitalist state.It had to protect the small fish from the big sharks. Even where the state could make profit by keeping out competition from traders, it was called upon to refrain from making profit (6).
The state had to purchase the products in such a way that it benefited the producers by giving them steadily increasing returns and by protecting them against distress sale.Commodities in constant demand should be always available. The blemishes (dosham) of the policy of stocking (samkala) (which was intended to benefit the producers) should not be allowed to harm the consumers (7).
The king's goods (rajapanya) were sold through small traders (vaidehakas) at different places (anekamukham) (8). It was not necessary that they should be sold at state-run shops directly to the consumers.These traders might sell these royal goods at fixed prices for a small commission (9).The consumer price would have been only marginally higher than the cost of production incurred by the state.These vaidehakas were not organised chambers of commerce or wholesalers who had the facility to stock goods and who were the main challengers to the state.
Kautilya encouraged the non-bodies (vaidehakas), the lower ranks of the trading class who were not members of organised groups.The surcharge collected from them was one-eleventh of the cost of production.This vyaji was the profit allowed to the state as the producer. If a trader got an equal amount for his services, it may be presumed that the consumer price would have been more than the cost of production by twenty percent.
In this process, the wholesaler is kept out.It may be noted that a private trader (vaisya) selling goods produced by private entrepreneurs was required to hand over one-tenth of his merchandise to the state as tax. He could not have made a profit of more than ten percent on consumer goods after tax.He had to compete with the vaidehakas who enjoyed state patronage.The retailer was not out of business.Kautilyan state promoted the interests of the smaller producers and smaller traders who did not belong to organised bodies.
Components of Consumer Price
If a margin of five percent is allowed to cover the traders expenses, the consumer would have paid 125 panas on a state commodity (rajapanya), which included 25 panas as wages of workers,30 panas as return on investment, 25 panas as cost of inputs, 10 panas as rent, 10 panas hire charge for tools, 10 panas as profit in lieu of tax, 10 panas as traders commission and 5 panas as his expenses.Many critics of Arthasastra have failed to bring out this picture of the components of the consumer price.The retailers, vaidehakas, were not required to go through the grill of auction that characterised market operations.
State trade did not displace private trade but held the latter under reins.Goods produced on private lands (parabhumi) were not discriminated against. [It is wrong to translate the term, parabhumi as foreign land.]These producers too were given concessions (anugraha) (11).Concessions were given to those producers who brought goods from afar (but not from abroad)by boats or by caravans (12).
Foreign Traders vs Local Traders
No sale was permitted outside the market centre.Some traders were foreigners. No lawsuit, which had political implications, could be entertained against foreign traders.But this charter of exemption fromvyavahara rules and regulations was not extended to foreigntraders who were members or associates of a local trade body (13). (Multinationals deceive all states and all peoples.) Only a genuine foreign trader who brought in the goods included in the list of permitted imports was given immunity and not foreign collaborators of local importers. Imports were not totally banned even as exports were not.The Kautilyan state did not protect traders.[Some Marxists are seen to have suppressed this aspect of Kautilyan political economy.]
Protection was needed for the producer and the consumer against the trader, whether local or foreign. Local traders were asked to face competition from the foreign traders.Imports were allowed not for meeting local needs but for maintaining good relations with other states.Imports meet the fancies of the elite and not the basic needs of the masses.The Kautilyan state was on guard against seduction of its people by other rulers. Import policy had to take into account this factor.
The Bureau and Trade in State Goods
Employees in charge of trade in state goods (rajapanya) had to deposit the entire sale proceeds for the day with a statement of accounts. They were not entitled to any commission. They had to sell at the prescribed rates (which included their wages). But in trade with non-consumers, the chief of the bureau was free to determine the price and value of the goods bartered. He took into account the cost of tools, road cess, escort charges, ferry charges, transport expenses etc. and the share in profit due to the seller and the buyer. This was with reference to the agent engaged by the chief to sell the goods.Should such transactions prove unprofitable to the state, he should take into account the final advantage in entering the transaction (that is, the non-monetary considerations of the polity) (18,19).
Some times the shorter water route might be rejected as being unsafe and the longer land route preferred for transporting goods.[Many rivers had no bridges.]The director could use his discretion while establishing transaction with trading concerns.The state was not totally debarred from becoming a party to a trade dispute (vyavahara) that was justiciable in a court of law though its domineering position in the economy was being compromised by its surrender of its right to be the sole arbiter in disputes.The economic state cannot be as sovereign as an autocratic political state can be.
Not more than one-fourth of the state goods (what had been taken into the central warehouse, whether produced on the kings lands or on those of others) could be traded off for considerations other than economic benefits (20). The entire economy of the state could not be placed at the mercy of the third parties, whether internal or external.The state had to get the favour (anugraha) of the powerful chiefs of the border areas and also of forest areas and even of the administrators and representative bodies of the city (paura) and the rural areas (janapada). This was necessary to ensure safe passage for its costly goods sold to outsiders in exchange for other goods of high value(21). Such transactions were risky. After these goods were taken to their destination, the officer in charge of foreign trade should enter into transactions in the presence of these chiefs who would safeguard the interests of the state.
Bureaucracy was not skilled in inter-state barter trade of a delicate nature. Before entering into such transactions, the officer had to pay all the taxes due to the concerned autonomous local port authority or foreign country lest the latter impounded the goods for violation of its rules (23).The state could forgo the taxes due to it but could not get its own imports and exports exempted from local taxes. The port rules had to be honoured (24).In riverine merchandise, the officer might trade only if it was profitable and not risky.
Bureau of Tolls (Sulka) and Market (Bk.2 Ch.21)
Each cluster of ten villages (samgrahana) had a market centre.Toll-gates were set up at the main entrances to the market.The eastern and northern gates were meant for entry and the western and southern for exit. All details about the traders entering the market and the goods brought by them were to be recorded at the entrance gates and duly stamped entrance passes issued (2-21-3). Goods brought in without a pass or with forged or mutilated stamps were fined heavily. Both the quantity and the price of the goods brought in had to be declared at the entrance (7).It was presumed to be the minimum price at which the producer-trader was prepared to part with them. Under invoicing was punishable.
The goods had to be sold by auction (8).The highest bidder had to buy them. The difference between the minimum price quoted by the seller (producer) and the higher price offered by the buyer (consumer) went to the state. There were no brokers.It was hence not in the interest of the producer to understate the quantity or quality of his goods.The toll amount collected by the state was used to maintain the market centre (9).
It was not necessary for one to sell at a loss. Any such sale became suspect. Auction prevented profiteering by the producer-seller.Any attempt to cheat the officers on tolls, prices or quantities invited heavy fines. If a bidder deliberately raised the price to deter his rivals, the amount by which the price was increased (mulyavrddhi) went to the state. Besides, the duty on the increased amount was doubled (13).The bidders were deterred so that the genuine producers and consumers were protected.
Competitive economy called for supervision by the state to contain exploitation by traders. The guilty officer had to pay eight times the value of the gain lost by the state (14).Smuggling goods past the toll-gate without paying the prescribed tolls was severely punished.The producer-seller had to include the toll payable in the minimum price quoted by him. It was refunded if he could not sell his goods.Concessions and exemptions in tolls were allowed on goods brought in for marriage, bridal and other gifts and religious rituals.But for false declaration, penalty equal to one for theft was levied (19).The goods were confiscated and an equal amount (of toll) was levied as fine. So too tampering with passes was penalised severely (21).
Border-posts: Imports and Exports
There were tollgates at the borders of the janapada. Near them, there were special market centres for inter-state and inter-janapada trade. (The mega-state had five janapadas under its control.) Weapons, armours, coats of mail, jewels, metals, chariots, grains and cattle were not to be exported. Any attempt to smuggle them out led to their confiscation and heavy fine (22).If a trader brought in any of these items from outside the state, it had to be sold outside the market centre at the border. It was exempt from tolls. It was a silent approval given to clandestine import of valuable goods. The state was, officially, not a party to this illicit trade. But every state has abetted such trade.
The officer in charge of the frontier region (antapala) had the power to charge road cess of a pana and a quarter per cartload of goods and one sixteenth of a pana per shoulder-load. He had to ensure the safety of the traders and their goods and cattle passing through his area. He had to compensate the goods lost or stolen en route (25).
He had to examine the caravans arriving from other countries and send them to the nearby market centre with an identity pass (26).Secret agents (especially of the cadre of vaidehakas) communicated to the king (raja) directly about the arrival of these caravans (27).The king informed the officer in charge of the market (who was not subordinate to the antapala) whether the entry of the caravans was permitted or not.(This prevented collusion between the antapala, governor of the border area and the chiefs of the caravans.) Only after the receipt of the kings permission, he could allow them to unload their goods for sale. The traders from abroad were told that the duties levied were as per rules and that the king's decision was final (29).The officer had no power to exempt or reduce or enhance the duties. No transactions with foreign traders could be made without the knowledge and specific permission of the king.
There could be no arbitrator for assessing the value of or determining the admissibility of the foreign goods brought in for sale.There were no inter-state conventions or covenants with respect to consumer goods.They were being sold by private traders of one country to those of another and were hence liable to be taxed heavily.Such trade was not inter-state or international trade. (Economists to note) If a trader concealed goods of low value, the penalty was eight times the already high import duty.The costlier goods were confiscated if they were not declared correctly (30).
Imports were costly and evasion of custom duty was risky. The state discouraged import of useless goods and goods harmful to the country. Goods, which were highly beneficial to the country like rare seeds were allowed duty-free (31).
Tariff-Sulka Vyavahara (Bk.2Ch.22)
The goods arriving at the market centre were classified as coming from the rural hinterland (bahyam), the industrial centres (abhyantaram) and the autonomous regions under the kings suzerainty (atithyam). (1)The officer had to similarly note their destination too. The taxes varied according to where the goods came from and which area they were being taken to. Commodities were taxed not while under production or while leaving the production centre (farm or forest or factory) but while entering the market centre.[There was no excise duty.]The entry tax was maximum one-fifth of the value of the goods declared by the producer-seller (3).
It was based on the cost of production (which included wages, cost of inputs, hire charges, rent, interest on investment, profit expected and tax payable on profit). In the final analysis the entry tax was transferred to the consumer-buyer.Entry tax included ten percent of the cost of the produce as income tax, which all traders had to pay on their merchandise.One-fifth of the value of the goods as such tax was too heavy for the consumers.
They were given concessions on several items.(a) On perishable goods (e.g. fish, meat, vegetables, roots and flowers) which did not involve high labour cost,the entry tax was one-sixth of the price declared. (b) On luxury items (e.g. conch, gems, diamonds, necklaces of corals and pearls),neutral experts were called in to assess the value before levying the duty. The cost of raw materials was known to the state as it controlled all mines. The experts had to determine the cost of expertise and time consumed.(c) On quazi-luxury items (e.g. silk yarn and silk cloth, armours, vermilion, sandalwood and spices) where there was no steady demand, the duty was one-tenth of the value declared or only one-fifteenth.
(d) Metal goods and ores were taxed less and so too, wool and leather. Thus the main industrial sector of consumer goods got substantial concessions.(e) On essential items like grains, salt, sugar, oil, cooked food, honey, medicines, cotton yarn and cloth, animals and birds, wood and bamboo, barks, earthenware etc.the duty was only four to five percent (2-22-4to7). Only those who indulged in conspicuous consumption were taxed heavily. Meat eating and fish eating were made costly for the urban consumers. The villagers were perhaps ordinarily vegetarians.The industrial workers had to buy their (cheap) grains at the market.
The entry-tax was not more than one-fifth of the cost declared.But the state gave concessions on the basis of the benefit which the country or region (desa) derived from the import of particular goods (8). Dvaradeyam was applicable to traders arriving at the market centres on the border of the janapada or desa.Income to the exchequer was not the sole or even the main criterion that determined tariffs and import policy.Sale of goods at the places of their origin or production was banned (9).For taking away metals from mines, the penalty was six times the cost.On flowers and fruits, it was 54 percent and on vegetables and roots it was less. So too on grains taken away from the fields the penalty was fairly high.While levying duties, the practices of the communities and regions were respected (15).
KAUTILYA AND ECONOMIC LAWS
Interest (Bk.3 Ch. 11)
Banking of modern types was not present during Kautilyan times. But lending money was common and there were individuals who accepted deposits and pledges and lent money to the needy. Lending money did suffer social opprobrium and it invited regulation by the state.Kautilya prescribed a pana and a quarter per month per hundred as the rate of interest for non-commercial purposes. This rate was considered to be just and lawful, dharmya. No court entertained any application against this reasonable rate. (Most of the deals were entered into orally and written records were not kept.) The creditor was free to accept less but it was assumed that he had accepted interest at this rate (that is, 15 percent per annum) when he was taxed (10 percent on his income).
When a trade transaction (vyavahara) was involved, that is, where the loan was used for purchase of commodities, animals, etc.,the commercial rate of interest (vyavaharikam) was substantially higher. It was fixed at 5 percent per month for trade by land routes, 10 percent by forest routes and 20 percent by sea routes (1). The risk factor was taken into account. Charging interests above these prescribed limits was punished (2). The state stood guarantee for the recovery of the loan and accorded protection to the traders and commodities.The expenses incurred by the state guard accompanying the caravans were collected from both the traders and their creditors.
When the king did not guarantee the security (yogakshema) of the loans and the trade commodities, the rates of interest as commonly followed (charitra) by creditors and debtors (dhanika and dharanika) would be valid (3). (Dharma, vyavahara, charitra and rajasasana were treated as the four bases of civil law.)
The judges had to take into account the three situations, non-commercial borrowals, state-protected trade and trade not protected by the state, dharmya, vyavahara and charitra. The state is seen to have reduced the risk factor and controlled the rate of interest. The better the security guaranteed by the state to trade, the less the rate of interest would be. Kautilyan state was able to provide substantial protection to trade and traders.
There has been considerable confusion in interpreting the statement 3-11-4. Agricultural credit was an important issue. Cultivators borrowed grains for sowing and undertook to return them after harvest. The yield was normally ten times what was sown. The state had ruled that the lender could not ask for more than 50% of what he had lent,as interest.
[It is not sound to interpret that the lender of the seeds could collect half of the harvest as his share. Such interpretation led to fleecing the cultivators during the British rule over India.The 19th and early 20th century editors of the Dharmasastras and Arthasastras were required to incorporate in them clauses that were in tune with the laws that the colonial rulers approved so that the latter might claim that they had not violated the assurance given that the peoples of India would be governed in accordance with their own codes.]
The lender got about 10% per month as interest and it was almost double the rate prescribed for trade along safe land routes. The cultivator would lose all when there was drought or flood. Hence the creditor expected his risk to be covered by this unduly high rate of interest. He demanded that the loan should not be written off and the interest should not be waived. The interest was added to the principal and interest at the same rate on the enhanced principal was collected after the harvest.The peasant was bled but not by the state.
The trader in grains who borrowed money to purchase his stocks from the cultivator had to pay half of his profit at the end of the year as interest to the lender (5). The trader would get a profit of more than 60% (and after tax not more than 50%). The moneylender would thus have claimed an interest of about 25% as investor in this trade. This was deemed justified and as not casting too tough a burden on the consumer. Of course trade in imported goods brought the trader double the amount as profit (4-2-28). Imported goods were costlier than local goods.
In a single transaction, the trader got a profit of 5% on local goods and up to 10% on imported goods. Annually there would have been ten to twelve turnovers utilizing the principal that was borrowed from the moneylender (called financier nowadays). Profit and interest are two sides of the same coin. Both the trader and his creditor had to grapple with risk and seek state protection. The Kautilyan economic state gave them protection but imposed severe conditions.
Kautilya holds both the creditor and the debtor responsible for the evil of usury. While he ensures that the heirs of the deceased debtor repay the loans, he protects the debtor against harassment by the usurers. He protects the cultivators and the government servants against being caught hold of by the creditors during the agricultural operations or while on duty. The debtor had to be given a fair chance to survive and repay the debt incurred by him through folly or out of necessity.
This policy is seen in the rules governing debts and also those governing pledges. Not only instruments of production but even houses and lands were being pledged. Kautilya was anxious to protect the holders of real estate and prevent the moneylenders from becoming virtual owners of the estate through shrewd lending to credulous owners. But he recognized the beneficial role of moneylenders in providing the capital needed for trade and for production. The state stepped in only to check the ravages of usury.
Vyavahara, economic dispute, had its origin in debt, according to Manusmrti. A debt situation means unequal relations between the two individuals, creditor and debtor.When the debtor is engaged in a prolonged sacrifice (which required parting with what one had earned to the needy) and is hence not engaged in any remunerative work, interest cannot accrue for that period.
Similarly, when he is detained for study and service in his teachers house, he is exempt from interest.In other words, loans intended to meet the expenses on a religious sacrifice or on education were to be given free of interest.[It is not to be interpreted that the Brahman scholars introduced these clauses to protect their class, which was required to be engaged in studies and performance of sacrifices.]
The diseased, the too poor and the minors shall not be called upon to pay interest.Interest accrues only when the credit is used for gaining wealth. [Modern jurists have overlooked these social aspects while dealing with interest on credit.] After specifying the just rates of interest and regulating the modes of debt collection, Kautilya deals with their social implications. (3-11-10).
If the creditor wantonly neglects collection of the debt for ten years, he is not eligible to get it back (13). But if he had overlooked to help the minor or the old or the sick debtor, his claim would stay. So too, when he had helped the debtor to tide over the strains during a period of distress or if the debtor had gone on a journey, the creditors claim did not fail. If the creditor had not been able to recover the amount lent because the debtor had left the country or because of disorder in the kingdom, his claim continued to be valid. But the total interest wherever due could not exceed the principal.
Sons of a deceased debtor had to repay the principal with interest as they inherited not only their fathers assets but also his liabilities. If kinsmen (dayadas) claim his property, in the absence of sons, they are treated as co-parceners in his financial undertakings and become responsible for the repayment of the loans to his creditor (14). And his co-debtors and sureties too are liable to repay the loan with interest. Of course minors could not be cited as sureties (16). A debtor cannot be sued for more than one debt at a time.
If the debtor intends to leave the region, being overwhelmed by loss of social status, he has to pay the debts either in the order in which he has incurred them or first pay his debts to the state (king, raja) and then to the Vedic scholars (srotriyas) before repaying the loan taken from the professional moneylenders (20). [When was this clause introduced?]
If the creditor enters into a bond with an individual who is not free to operate independent of his joint-family, he does so at his own risk.Such a debt cannot be recovered from the other members of the family. Normally, a wife is not responsible for the debts incurred by her husband while a husband is responsible for the debts incurred by the wife (23). If a husband flees abandoning his wife to the mercy of his creditors, he is liable to be punished.
Among herdsmen (gopalakas) and sharecroppers (ardhasitikas), the husband and wife owned the property jointly. Hence if the husband contracted a debt, it could be recovered from the wife (24). The loan had been used for a joint venture in these cases. Many modern scholars are seen to have overlooked this aspect of the role and rights of the wives in the agro-pastoral sectors and applied to all the classes the same rules as applicable to the ruling class of Kshatriyas and the educated class of Brahmans. [The procedure for examining witnesses and determining their competence is then described in 3-11-26 to 50.]
Deposits (Bk3. Ch.12)
The rules governing debts are applicable to deposits also (1). The depositor is akin to a creditor and the depository to a debtor. As we pass from debts to deposits, we enter the realm of commerce proper. Banking required an atmosphere of peace, security and confidence.
An individual may agree to protect the articles deposited with him. But if invasion of the primary state (durga-rashtra) by an external chakra, confederation of states, leads to its being looted or if forest men raid it or if a village or a caravan or a herd is plundered by brigands or if the protective union (chakra), the confederation of which it is a member, collapses, or if the boat had been sunk or plundered by pirates, the depository is not liable to return the deposit (2). [This clause pertains to the period when the Prthu and Bharata confederations had collapsed.]
In the case of durga-rashtra pattern, the king was stationed in the fort and protected the people around it. This pattern preceded the durga-janapada system introduced by Kautilya. In the latter the janapada was autonomous and depended on the central state army only for limited purposes.
There was no insurance against loss of property on account of war, robbery, piracy, fire and floods. The state stood guarantee only for goods by specified land or forest or water routes. It did not stand guarantee for goods deposited with private bankers.
The chakra alliance itself was weak and not all units in the union (yuktam) were willing to ensure the traders even the normal protection. [Most commentators have failed to notice this shortcoming of the confederation and also of the existence of rival confederations.] The king could ensure protection only within his primary state (durga-rashtra) and not beyond its borders even if he was a member of a chakra, confederation.
The property deposited with an authorized individual (banker) is not to be treated as property loaned. The depository is not eligible to use it for his own purpose during the period it is in his custody. He is responsible for its safe return to the depositor. Deposit indicates trust in the depository. If he belies that trust by mortgaging or selling or losing it, he is punished severely. He has to pay four times its value to the depositor and five times its value to the state as fine (danda)..But it is not property borrowed by him and hence his heirs cannot be required to pay the value of the lost deposit.
The relationship between the depositor and the approved depository is not merely contractual as one between a creditor and a debtor. It is one of trust guaranteed by the state. While the debt situation involves two families at the most, the deposit situation involves two individuals and the state. Since faith in the judgment of the latter in recognizing the credentials of the banker is shattered when he fails to return the deposit, the punishment is severe. It is a deterrent against fraud and negligence by the depositories.
Banking can flourish only as trust and confidence develop. In the absence of a strong government and rule of law, internal banking cannot succeed. Kautilya envisaged inter-state banking within the confederation (chakra) through mutual agreements among its members.
Pledges (Bk.3 Ch.12)
When articles are pledged to the moneylender, it has got the traits of a debt situation in addition to trust or lack of it. Here all the regulations required for deposits feature and some more. A usufructory pledge shall never be lost to the debtor. As G.N. Jha points out Narada Smrti too found it necessary to enumerate which pledges could not be lost. According to Kautilya, an unproductive pledge can be lost for it gives an unfair advantage to the debtor.
Interest cannot be charged if the creditor uses the pledge and can be charged if he does not use it or if he cannot use it. Kautilya deals with the situation where the value of the pledge deteriorates to the disadvantage of the pledgee. He provides for a public reassessment of its value. The banker can do so only when the Dharmastha, the civil judge permits (14).
Kautilyan provisions are more thorough than those noticed in the Smrtis. Such reassessment had to be made under the supervision of the controller of deposits (adipala) and by experts. The controller could even sell the pledge by auction and in the presence of the pledger if the latter failed to redeem it.
The banker was required to ensure that the value of the pledge did not deteriorate.The pledgee had to get tilled the land pledged to him even if the pledger did not provide labour, cattle and tools (16). The state tried to protect the quality of the land. The pledgee is warned against indifference to the usufruct and also against rash exploitation of the land and cattle pledged.
In the case of non-usufructory pledge, exploitation in violation of the contract will lead to the forfeiture of the loan advanced and of the profits extracted by the pledgee. Kautilyas directive reversed the Brhaspati tradition (science of economic occupationsvarta) which favoured the banker.
Adesa is payment through orders. The banker accepts the deposit at one town and orders his agent at another to make the payment. The depository is held to be personally responsible for the fulfillment of the conditions of the transaction. If his courier does not reach his destination or is robbed by highwaymen, he cannot be proceeded against nor his agent at the destination. The depositor may proceed against the depository in the civil court.
The banking system was not more advanced than what this picture presents. Kautilya was anxious that the bankers should not use the agency to defraud the depositors.They were not under a central bank functioning as a clearing-house. By Kautilyas times, that is, by the Mahabharata times, banking had grown beyond infancy but had not yet attained adulthood. Bankers of different towns functioned as agents of one another while the travelling merchants functioned as couriers of valuable goods and pay orders.
Kautilya protects the interests of both the parties. He distinguishes between an open deposit (upanidhi) and a sealed deposit (nikshepa) whose contents and value are not known to the depository. The former could be handed over to the depository through an agent. The latter had no witnesses to the contents. What would be the position if the depository denied having received the contents?
Since the depositories ordinarily belonged to influential families, only the character and social status of the depositor could weigh as evidences in the court against the depository. If the former happened to be an artisan, ordinarily the verdict went against him as artisans were considered to be of impure character (36). But Kautilya would not accept that the depository was necessarily honest and that the artisan-depositor was dishonest.
The social laws (dharma) pertaining to sealed deposits (nikshepa) had not provided for prior assessment (karanapurva) of the contents of the deposit (37). There was provision only for open delivery at request. Kautilya was not in favour of the emphasis placed by the bankers on secrecy in transactions for it worked against the depositors. The latter should guard their interests through witnesses and by secret marks (38). These witnesses could not attest any deed but could depose and be examined when produced in court. Kautilya introduced a major shift in judicial proceedings.
Till Kautilya's times the practice worked in favour of the depository, with the onus of proof cast on the depositor.Kautilya argues that the depositor may be even an ascetic or a pious person and that the depository need not be always believed. It was of first importance to inquire and ascertain how the property in dispute came under ones possession. The judges had to examine all the circumstances connected with the transaction. Emphasis was not on the relative social statuses of the plaintiff and the respondent but on the economic capabilities (arthasamarthyam) of the plaintiff (51). He had to establish that he was a respectable citizen and had rightfully earned the property claimed by him as having been deposited with the banker.
Kautilya ended trial by ordeal and prevented malpractice, which the rich bankers resorted to. All transactions had to be in the open and in the presence of witnesses and all deeds should specify place, time, quantity and quality of the goods deposited or pledged. All transactions were based on the principle of equality of status (between the two parties) in the eyes of law (mithasamavaya) (52,53).
In the Kautilyan scheme, the judiciary was independent of the executive. We pointed out how four administrative services were created on the basis of the findings in the four tests, dharma, artha, kama and bhaya. The pious and incorruptible among the candidates who passed the dharma test were taken into the judiciary as dharmasthas. Those persons who passed the artha test of reducing expenses and increasing gains were appointed as amatyas. Those persons who passed the kama test and were free from temptations of pleasure were appointed to fields pertaining to arts and entertainment, in vihars. Those persons who proved to be fearless were appointed in the embassies and in security services.
The amatyas manned the treasury and the bureaucracy, which belonged to the amatyaprakrti. The third cadre who passed the test of kama was associated with the paura-janapada and the fourth who were unafraid, with theRajaprakrti and the army and also the mitra, friendly states. Only those few who had passed all the four tests and were experienced in all the four services could be appointed as ministers, mantris. [Most of the commentators have failed to grasp this aspect that distinguished between the two cadres, mantris and amatyas.]
These ministers had more power than these four services had. The cabinet of ministers was superior to the judiciary. But it ranked lower than the triumvirate, the King, the Rajapurohita and the Prime Minister. This triumvirate was not part of the executive. It laid down the policy of the state. But none of the three, the cabinet, the executive and the judiciary had the power to legislate.
Only the sabha, the house of nobles (devas) and the samiti, the council of scholars (rshis) and senior citizens (pitaras) could legislate. (Not even the kingrajan) could legislate though he was the head of the state and was duly elected by the college of Rajanyas to that post and had secured the approval of the sabha and the samiti. He was its chief executive but he was not a judge. [It may be noted that a ruler who was the head of the state and also the head of the judiciary was addressed as Maharaja.]
Though the Kautilyan king and his cabinet of ministers were superior to the judiciary they could not dictate terms to it. This position had emerged soon after the Prthu constitution (as incorporated in the Manusmrti) came into force. It followed the recommendations of Manu Vaivasvata and Kashyapa. It may be noted here that this constitution made emergence of autocracy impossible. [Kautilya did not follow all the provisions of the Prthu constitution. He differed from Manusmrti too.]
Courts: Location (Bk.3. Ch.1)
Administration of justice required coordination between the two services, the judiciary and the executive. Later Smrtis asserted the superiority of dharma over artha, of the judiciary that defined and defended ethics over the executive that dealt with pursuit of material interests. Kautilya held artha to be more important than the other social values,as fulfilment of the pursuit of the objectives of dharma and kama depended on it for financial resources.Yet he consented to place the judiciary on par with the executive. The bench had three dharmasthas and three amatyas on it. Some may hesitate to grant it the status of an independent judiciary. But even in modern democracies, the head of the government decides who are to be selected as judges. (An independent judiciary is an ideal but not a reality.)
There were three levels of courts, the lowest located at the rural centres (samgrahanas), the middle at the county level (dronamukhas) and the higher at the district (sthaniya) headquarters. They were manned by (dharmasthas of the three ranks, lower, middle and higher. [There were no panchayats (five member juries). These came into existence far later.] The Kautilyan mega-state had many autonomous provinces, with each province (janapada or desa) divided into four districts (sthaniyas or pradesas).
Inter-janapada disputes were settled by special courts located on the junctions between janapadas, at janapada-samdhis. The senior among the judges must have sat on these benches. They were required to arbitrate where customs and practices among desas, regions, differed.
It does not seem that one could appeal to the court at dronamukha against the verdict given by the rural court (samgrahana) or to the district (sthaniya) court against the lower courts on routine litigation. We should not consider this absence of the right to appeal as a blemish. Every bench functioned within its recognized jurisdiction. [Manusmrti seems to have treated the king as the appellate authority.] There were no advocates. Plaintiffs and respondents put forth their cases by themselves. There was a bench but no bar.
These civil courts did not deal with crimes though they were empowered to penalize those found guilty in economic transactions, vyavahara. Only disputes of an economic nature came up before them (3-1-1). They had a vast jurisdiction though they did not try cases on heresy and murder, treason and revolt.
As far as vyavahara was concerned, the Kautilyan king did not have original or even appellate powers, though he was an upholder of dharma, a dharmapravartaka. [It is misleading to translate dharma as justice.] The king was not a judge though he might announce the verdicts as given by the court and though he might preside over its proceedings. [The dharmasthas and amatyas belonged to respectable families of the janapada.]
It is necessary to distinguish between panya and vyavahara, cash purchase and sale, and legal transactions. The former was regulated by trade rules prescribed by the bureaus and was not justiciable. The latter were governed by the provisions of civil law. Wages and prices depended on the ability to bargain.Demand and supply theorems determined these. The state intervened to protect both the producer and the consumer. vyavahara. The court handled all disputes about property. In cash transactions, no third party was involved. In the disputes in such transactions, the state was not an arbitrator though it regulated the economy. It only outlined the economic policy. The actions of the officials could not be challenged in a court of law. But all other matters pertaining to assets and liabilities, families and communities, were governed by civil law,
All transactions concluded in the absence of one of the parties concerned, or inside a house or at night or in the forest or by fraud or in secret were invalid (3-1-2). A person participating in an invalid transaction or instigating it was liable to be punished. The minimum penalty was 48 to 96 panas (as prescribed for robbery, sahasa) (3,8). Every witness to an invalid transaction was fined half that amount. But there could be alleviating circumstances (4 to 11).
The court had to be reasonable and not too rigid. Its discretionary powers were however limited. It had to first ascertain the validity of the transaction. One must be a free citizen and not dependent on others if he has to enter into a transaction (vyavahara). One dependent on his father or on his sons or on his elder brother is not competent to enter a transaction. Similarly a woman (stri) who is dependent on her husband or her son is incompetent. [It may be inferred that sonless widows, spinsters and divorcees were not debarred from entering into economic transactions. Not all adults among men were held to be competent. A proper appreciation of womens rights is called for. Baseless adulation and unwarranted and biased vilification of the ancient Indian codes are unhelpful.] (3-1-12)
A dasa, a servant who was not a free citizen (Arya) and who could not disobey his master was not competent to enter into a deal. In other words, he cannot be given the power of attorney. This was also intended to prevent coercion and exploitation of the helpless servant by his master. Sometimes a family pledged one of its members to the moneylender. Such a pledged member was in the status of a dasa. He was not competent to enter into legal transactions. Similarly minors and the very old, monks and convicts, the crippled and beggars were all debarred from being parties to economic transactions. Law protected the weak against exploitation. It is perverse to argue that it was partial to the rich or to the higher classes or to men. Manusmrti too needs to be appraised correctly and not adulated blindly or vilified on the basis of preconceived notions.
The court had to ascertain whether every party to the deal was competent to enter into it. It should however be not too rigid. Though technically incompetent, one might have been authorized by his family to transact business on his own or on behalf of others. This authorization (for instance of a wife by her husband) had to be honoured (13). Precaution was taken to ensure that deeds entered into in fits of rage or in sheer despair or by the insane or under intoxication were not validated (14). Deeds had to be entered into only by the competent and freely, consciously and wisely. Patently foolish and dishonest transactions were struck down. The documents had to fulfill all the formalities prescribed in 3-1-15.
The latest will or deed shall be held to be authoritative and as superseding the earlier ones (16). While the last will is valid, the wishes of a dying person need not be honoured. If he pledged or sold any property at that stage it would not be a valid transaction. The pledger must be in a position to redeem the pledge. This proviso prevented the success of the unscrupulous elements. The deeds were valid only if all the parties involved belonged to the same category or class (varga). Every class had its own set of rules pertaining to vocation, marriage, succession etc. Any transaction involving members of different communities and classes was likely to generate friction in due course, requiring elaborate discussions and acceptable verdicts.
The Court Procedure (3-1-34 to 37)
Modern Indian jurists have written a lot on the rules in 3-1-17 to 33. It is not necessary to dwell on them again here. It is necessary to reconsider 34 and 35. Shama Sastri interprets these rules as: If the plaintiff fails to substantiate his case against a diseased defendant, he shall pay a fine and perform work (like a slave) under the orders of the defendant, as determined by witnesses. If he proves his case, he may be permitted to take possession of the property hypothecated to him. Kangle translates differently: The statement of a witness who dies or suffers from misfortune is without value. The successful (plaintiff) may, after paying the fine, make (a poor defendant) work for him or the defendant may keep a pledge, if he so desires.
The divergence between the two interpretations has to be reconciled. Both the editors have gone off the track and favoured the rich moneylenders. The intent was to reject the case, which cited a dead or an incompetent person as a witness. The witness must be alive and available and be able to stand the strain of examination (which often involved tough ordeals) by a court.
If the case is tried without taking into account the stand of the absent (whether dead or alive) or the incompetent witness, whoever of the two, plaintiff and defendant, fails will be punished. He will be awarded simple imprisonment with labour as punishment. The successful party will take the property in dispute. There is no intent to make one party to work under the other. Kautilyan judicial practices were not as elaborate as the later Smrtis were. But they were not primitive or crude or arbitrary but were rational. The guilty may be discharged on bail given by a pious person (36).
Kautilya did not favour imprisonment for it was not economically beneficial. [Imprisonment of political suspects and offenders is a different issue.] An interesting alternative is noticed in 3-1-37. The guilty may be asked to patrol the streets or the area to keep away violent elements (ugras). Of course the Brahmans were exempt from this duty. The Brahmans could not be put to death or imprisoned or made to do hard work and they were too poor to present bail. [Brahmanas and Sramanas enjoyed the same privileges and restrictions. They could not move about during the nights or carry weapons even in self-defence.]