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Updated on June 22, 2012

A systematic form of Government in ancient India was basically the handiwork of Kautilya, which is crystallized in his work ARTHASHASTRA. It is believed that he was born in the hilly tract of Kolli in South India and that his original name was Vishnu Gupta. In history however, he is immortalized by the name of CHANAKYA. This Brahmin with a sharp intellect studied at the ancient Indian University of Takshasila (Taxila) and after years of arduous study became a teacher in his alma mater. He later left the confines of the University and went to Pataliputra (Patna) to seek his fortune in the kingdom of the Nandas who were great patrons of scholars like Panini, Varsha etc. Unaware of court etiquette and intrigues he not only had a cold reception but was also insulted by the King. Brimming with anger, he swore revenge and left the court of the Nandas and wandered all over the country. It was during this sojourn he got acquainted with Chandra Gupta of the Maurya clan whose throne was usurped by the Nanda King. This meeting laid the foundation of the Mauryan Empire.


Kautilya’s magnum opus ARTHASHASTRA was a handbook meant for Kings. Kautilya had the foresight to realize that the goal of public administration must be people’s welfare; which meant that rural development was as important as urban, failing which people tend to migrate from rural to urban areas. He therefore placed emphasis on agriculture, animal husbandry, trade and commerce.

ARTHASHASTRA as a book on statecraft has a timeless appeal. Though it was a treatise based on agrarian society, its understanding on human nature is profound as revealed in the following excerpt:

….Just as fish moving under water cannot possibly be found out as drinking or not drinking water, so government servants employed in the government work cannot be found out while taking money for themselves.”

The book ARTHASHASTRA is composed in the form of brief statements called ‘SUTRAS’ and comprises of:

  • 15 books
  • 150 sections
  • 180 chapters
  • 6000 verses

The books cover the following subjects:

BOOKS 1-5: Internal Administration

BOOKS 6-13:Foreign relations

BOOK 14: Secret practice

BOOK 15 Plan of Work

According to Kautilya the elements of the state are:

  1. The King
  2. Minister
  3. Country
  4. Treasury
  5. Fort
  6. Army
  7. Ally

The ARTHASHASTRA mentions of eighteen important functionaries known as MAHAMATRA or TIRTHAS. They are :

  1. YUVARAJA: Crown prince
  2. SENAPATI: Commander-in-Chief
  3. MANTRIPARISHAD ADHYAKSHA: Head of the council of Ministers
  4. MANTRIN: Minister
  5. PUROHITA: Chaplain
  6. DAUVARIKA: palace usher
  7. ANTARVAMSIKA: Officer of the Royal Harem
  8. PRASASTA; Minister in charge of Encampment
  9. SAMAHARTA: Administrative head and Revenue collector
  10. SANNIDHATA: Controller of Stores
  11. NAYAKA: Commandant
  12. PRADESTA: Magistrate
  13. KARMANTIKA: Chief Architect
  14. DANDA PALA: Chief Army officer
  15. DURGA PALA: Officer-in-charge of Fort
  16. ANTAPALA: Officer-in-charge of Frontier post
  17. ATAVIKA: Chief of the Forest tribe


Kautilya had laid down an elaborate process for the selection of officers at various levels of the hierarchy. Once the basic qualifications have been met, candidates are tested with regard to their attitude to:

  • Piety
  • Lucre
  • Lust
  • Fear

Only those who successfully complete the test of piety are made judges and magistrates. Those who pass the monetary test are absorbed in the revenue department and candidates who are able to establish their proof against lust made Officers in charge of the King’s harem. The King’s personal staff and bodyguards are selected on the basis of their performance in the test of fear. The few who pass the entire tests are made councilor. The revenue officers have to undergo further tests. They have to prove their competence in practical work to their superior called UTARADHYAKSHAS. After successfully completing their probation they are made NITYADHIKARI.


There are two courts in the ARTHASHASTRA for the administration of justice. They are:


DHARMASTHYA handles civil cases, which are adjudicated on the basis of:

1. DHARMA or canon law

2. VYAVAHARA or procedural law

3. CHARITRA or usage and conventions

4. RAJASENA or royal decree

KANTAKASHODHANA deals with crime and cases related to Government servants in their official duties. It consists of a panel with three PRADESHTAS or magistrates and is assisted by spies entrusted with the unraveling of crime.


As agriculture was the mainstay of the people, Kautilya placed importance on land revenue. There were three types of revenue:

  • Income from taxes on goods produced within the country.
  • Income from taxes on exports and imports
  • Income from taxes on goods produced in the capital.

The main items of public expenditure were:

  • Public administration
  • National defense
  • Expenditure on maintaining the army
  • Salaries of ministers and government official

Kautilya believed that though the land was under monarchy, the king should adopt the concept of a welfare state. To borrow his own words “in the happiness of his (King’s) subjects lies his happiness, in their welfare, his welfare”

His economic policies were reflective of those times. Industries producing gold, silver, diamond and iron were to be owned by the state. On the other hand, agriculture, handicrafts etc could be under private enterprise. He believed in a system of price control and traders could have a mark up of 8% on domestic goods and 10% in imported goods. Money lending and charging of interest was permitted and interest could be in the range of 15%.

Kautilya was a pragmatist, and his views may seem similar to Niccolo Machiavelli another great pragmatist in the second millennium.


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  • ram_m profile image

    ram_m 3 years ago from India

    Thank you for the comments

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    Julia 3 years ago

    I find this valuable, of csroue when we ponder about the above words, this is what the modern world calls Project management, training for success, and what not Indeed Chanakya's teachings and principles are a valuable treasure to us, unfortunately, importance was not given to this valuable ancestoral thinking of the corporate world. Following this would have taken Indians to the corporate world much earlier, and to crown it, the corporate world with a lot of humanity