INTRODUCTION

Even though India and Indians never forgot the Arthsashtra, the study and practical applications
of the book lost its importance since the British rule1. Professor Shamashastray rediscovered
the book in 1905 and wrote its first English translation2. Ever since then, only two more
translations that are in English have been written.

Chanakya was a very learned scholar at the Takshashila University, an ancient Hindu
university, located in present in Pakistan, and the acharya of Chandragupta Maurya. He had
mastery over political science, economics, accounting, and governance, and he was the driving
force behind the creation of the Maurya dynasty3. Apart from Arthashastra, Kautilya wrote
several other books such as Chanakya-Sutras (Rules of Science) and Chanakya- Rajanitisastra
(Science of Government Policies)4. He is India’s most illustrious political economist of all
time. He was a true statesman who bridged the gap between experience and vision. For him,
good governance was paramount. He was well-versed with the characteristics of bureaucrats
and statesmen and laid down rules to prevent misuse of power. He explained that no amount
of rules and regulations or auditing can prevent unethical behaviour and that character-building
and action-oriented ethical values were essential. He explains the necessity of having strong
government finances and an able army.

The Arthsashtra, written by Kautilya is an ancient treatise dealing with the governance of a
country. Arthasastra is a very famous treatise on ancient India and was written around 300

B.C. The book deals with economics, administration, political ideas, ecology and various other
topics.

The discussion in Arthashastra is as relevant today as it was in Kautilya’s time. It states that
the moral duty of the king is to increase prosperity, ensure judicial fairness, and provide
national security. The book also describes duties of other key positions in the government such
as Police chief, Chief Justice, Treasurer, Defense minister, Commerce Minister and others. The
Arhashastra predates any similar body of work from the Greek, Roman or Chinese civilizations
and is the source of many modern practices such as double-entry book keeping method, audits,
etc.

1
http://hinduonline.co/DigitalLibrary/SmallBooks/ArthashastraofChanakyaEng.pdf. Accessed on 12 .10.2020.
2
Dr. Renu Tanwar, An Analytical Study of the Relevance of Arthshastra in Modern India, IOSR-JEF, Sept. 2014,
30. 32-35.
3
L.N. RANGARAJAN, Kautilya:The Arthasastra, (14th Ed. 2000).
4
Ibid
The Arthshastra equates political governance with economic governance. The end is economic
governance while political governance is the means. But as economic objectives are not
realized in the absence of political ones, then political governance becomes an end and
economic governance the means. 'The end justifies the means', this is supposed to be the basis
of Kautilyan philosophy. Political power and material wealth are the means and ends of
governance. And good governance - political or economic - depends upon justifying the ends
and means as the socio, economic and political conditions.
 CHAPTER I: ABOUT ITS AUTHOR
Kautilya wrote this treatise for Chandragupta Maurya and stated in its preface that it has been
written as a guide for “those who govern”. Kautilya was interested in establishment and
operation of the machinery through which the king preserves the integrity and solidarity of the
State and generates power5.

It is astonishing to observe that several concepts of present day management theories have been
explicitly explained by Kautilya in his work.

As in the present day management, the importance of vision, mission and motivation was
captured in Arthashastra.

Arthashastra, the treatise on Economic Administration was written by Kautilya in the 4th
century before Christ. It consists of 15 chapter, 380 Shlokas and 4968 Sutras. In all probability,
this treatise is the first ever book written on Practice of Management. It is essentially on the art
of governance and has an instructional tone6.

Kautilya, Arthashastra reminds ruler of every time, that his objectives for his rule are:

• Acquire power : (Making present business effective)

• Consolidate what has been acquired : (Making present business effective)
• Expand what has been acquired : (Identify potential and realize it)
• Enjoy what has been acquired : (Making it a different business for a different future)

Kautilya is aware that for efficient running of the State, elaborate machinery has to be
established. He is equally clear on the organizational aspects, human dimensions of an
organization as well as the leadership requirement of an organization.

He states that the Yuvaraj (Prince) should be trained in three specific areas:
• Arthashastra (economic administration)
• Nitishastra (foreign affairs)
• Dandaniti (political science).
Kautilya seems to have given a lot of thought to human resource development for the
government machinery. He is specific about the qualities Mantris must possess. He writes about
these qualities as qualifying standards for appointment as a Mantri. These qualities are:

• Drudhachitta (power of concentration)

5
L.N. RANGARAJAN, Kautilya:The Arthasastra, (14th Ed. 2000).
6
P.K. GAUTAM, One Hundred Years of Kautilya’s Arthasastra, IDSA, 20, (2nd Ed. 2013).
 • Shilavan (character)
• Pragna (thinking capability)
• Vangmi (communication skills)
• Daksha (observation / vigilance).
In addition, he highlights the competencies that a Mantri must possess. These competencies
are the same as the competencies advocated by the management gurus of the present times,
namely, Knowledge, Skills and Attitude.

Kautilya’s knowledge about human behavior is really astounding. He advises his Swamy about
six emotional devils which he should avoid and ensure that his cabinet members also avoid.
He makes it amply clear that times six emotional devils do not allow appropriate decision
making in any operation. The emotional devils identified by Kautilya are:

• Kama (lust)
• Krodha (anger)
• Lobha (greed)
• Mana (vanity)
• Mada (haughtiness)
• Harsh (overjoy).
At this stage, Kautilya refers to diplomacy as an important element in Nitishastra (foreign
affairs). His clarity of thought is evident from the identification off six attributes of diplomacy.
The attributes he talks about are:

• Intelligence
• Memory
• Cleverness of Speech
• Knowledge of Politics
• Morals and Readiness to Provide resources.
Though he is not shy of launching an attack as an external strategy, he also advises the use of
diplomacy as a useful strategy to be explored showing his pragmatic approach to the external
realities. He identifies the external threats as the superiority of strengths of other kingdoms as
well as ambitions of other kingdoms.

If one replaces the word ‘kingdom’ with ‘corporate’, Kautilya’s advice makes sense in today’s
corporate turf battles.
Finally, from the point of view of management of the kingdom, Kautilya’s advice to every ruler
is indeed introspective and valid to the corporate world of the 21st century. His advice is as
under:

• Ruler should run a diversified economy actively, efficiently, profitably and prudently.
• Diversified economy should consist of productive forests, water reservoirs, mines,
productive activities, trade, markets, roads, ports, and storages.
• Efficient management means setting up of realistic targets and meeting targets without
using overzealous methods.
• Wealth lies in economic activities. Proper direction and guidance from Ruler will
ensure current prosperity and future gains. Inactivity of Ruler in economic sphere will
bring the kingdom close to destruction.
• Ruler must bear in his mind that a king with depleted treasury is a weak king and the
easiest target for a takeover.
• Ruler should ensure enactment of prudent policies. Prudence should be based on
Dharma and Nyay that will ensure equal opportunity for all to earn a decent living.
• Profitability should not only mean surplus over costs. It should also mean provision of
investment for future growth.
• Availability of water is important. It is practical to acquire a small tract of land with
flowing water than a large tract that is dry and would need substantial investment to
generate water.
• An ideal Ruler is the one who has the highest qualities of leadership, intellect, energy
and personal attributes.
• Ruler can reign only with the help of others. He should appoint not more than four
advisors and sufficient number of Mantris to look after the governance of the State
machinery. While limiting the span of control for the Ruler, Kautilya warns against
centralization of power in the hands of the Ruler by stating “one wheel alone does not
move a chariot”.
• Ruler should take proper care in appointing advisors. He should have clarity in terms
of qualities an advisor should possess. Most important being practical experience,
thinking prowess, sound judgement and ability to differ while keeping total devotion to
the Ruler.

Throughout Arthashstra, Kautilya makes some really thought-provoking observations. I list

them below as Pearls of wisdom from Arthashastra:
Knowledge:

Small difference in ability can lead to enormous differences in results.

• Main aim throughout one’s career is to identify, acquire and develop these differences,
which yield superior results.
• Knowledge is important. Knowledge is cumulative. Once it exists, it grows. Every new
piece of knowledge reveals connections with other areas of knowledge. Each
breakthrough in knowledge creates new opportunities that expand and multiply.
• Thinking is creative. You can create your world by the way you think. Situation and
people have the meaning you give them. When you change your thinking, you change
your life. To take control of your life, you must take control of your mind.

Planning:

By failing to plan, you are planning to fail. Every effective performance is based on thorough
preparation.

• You should be firm about your goal, but flexible about the process of reaching the goal.

Leadership:

• A great leader shows ability to make decision and act boldly in the face of setbacks and
adversity.
• Power goes to the person who uses it most effectively.
• Leaders are sensitive to and are aware of the needs, feelings and motivation of those
they lead.
• Foundation of leadership consists of honesty, truthfulness and straight dealing.
• Leaders develop ability to predict and anticipate the future.
• Self-discipline is the most important personal quality of a leader.
Success:

Most important basis of success in any venture is pragmatism. Do not ask where the new idea
came from or who thought of it first. Ask only one question: does it work?

• There are certain basic universal laws. They do not change. Ignorance of these laws is
no excuse. Violation of these laws forces one to pay full penalty through
underachievement, frustration and failure.
Success needs action. Action needs initiative.
• For sustaining success, initiative to collect feedback is important. Feedback allows you
to take corrective action, which sustains success.
• For every effect, there is a specific cause. Success is not an accident. Success is not
based on chance. Success is not a matter of luck. Success is the result of well thought
out action.
HISTORICAL BACKGROUND OF THE ARTHASASTRA:

Chanakya also known as “Vishnugupta” - a reference name or “Kautilya”- Gotra name was
a Master of All disciplines .

He had self studied, mastered and taught Gemology (study of gemstone ), Ayurveda, espionage
(art of spying), crime, law, punishment and many more difficult subject. He helped
Chandragupta (founder and first king of Maurya empire) to dethrone Dhana nanda. (last king
of nanda dynasty) .It is not wrong to say that he was the Da vinci of political and military
science. (just a figure of speech)

Arthashastra is an Indian treatise/book written by Kautilya around 2400 years ago (forth
century BC). It contains around 600 sutras and 180 different topics. Artha means Wealth.
Chanakya had written an ancient source of knowledge with the purpose of teaching good
governance to the Kings and future leaders. It mainly teach us about Art of wealth, war and
politics.

Chandragupta and other successor (Including the Great King Ashoka ) had served and rose the
Maurya empire to the new heights by using knowledge and wisdom taught by Chanakya in
Arthashastra. There were many Arthashastra written before, but Chanakya had studied them
all and felt it had to be corrected, modified as per practicality and to be taught in simplest
manner hence he rewrote it. That is why it’s phrased as “Kautilya’s Arthashstra”.

IMPORTANCE OF ARTHASASTRA:

The purpose of invoking Chanakya is to underline the fact that invaders like Afghans, Mughals
& Britishers were successful in overpowering and ruling India, primarily due to lack of political
unity among various small kingdoms, just for short term political gains etc.

The scope of this article is to discuss how British were successful in overpowered India, after
Mughals were weakened. British infamous divide and rule policy and certain other game of
thrones which they were playing could have been encountered by the philosophy (niti) of
Chanakya, had the Chanakya Neeti and Chanakya Sutra not been lost for more than a
millennium. and are believed to be discovered in 1905. Even though Indians never have
forgotten the Arthsashtra, but the study and practical applications of the book lost its
importance since the British rule. Professor Shama shastry rediscovered the book in 1905.
Primarily, British and their apologists more often try to justify Colonial rule on the grounds
that they were able to provide organized education system and the political Unity. To begin
with, Let me put it straight that due to continuous onslaught of foreign invaders, the powerful
and practical Indian education system namely Gurukul education was lost. Whatever was left
was systematically banned and removed by British. One must also know how Indian education
system/Gurukul system was overtaken by convent school culture under a well drafted plan to
produce Indians who think and behave like Englishman. Even after the Britishers were able to
take over the control of the Country still they realized that the public at large was not listening
to them. They were all listening to the Gurus. The Gurus had established large institutes where
they taught arts and crafts e.g if someone wants to learn carpentry etcetera, he was been
groomed for that specific job. In 1800 century AD there still were thousands of Gurukuls /
Madrassas & Universities, where the Gurus imparted knowledge based on the
requirements/interest of the student. The British in order to discover the base of the strength of
the India assigned job to Thomas Babington Macaulay, who reported as follows in 1835. Lord
Macaulay said,” I have travelled the length and breadth of the India and haven’t seen one
beggar, unless we break the spiritual and cultural heritage, which is the backbone of this
country. And, therefore, he proposed to replace the old ancient Indian education system with
British education system and make them believe that there system of education is greater and
superior to their own. They will lose their self - esteem and culture and will become what we
want them to become and help us to truly dominate the country”. Thus British was successful
in destroying the spiritual and cultural Indian Gurukul system of education with Government
certification system. It was their conspiracy to weaken India and rule here by producing more
and more donkeys to work for them.

Secondly, the British in moments of self-justifying amnesty also like to take credit for the
political unity of India. But every period of disorder throughout the Indian history has been
followed by a centralized impulse e.g. the Maurya (322 BCE- 185 BCE), Gupta (320-550 CE)
and Mughal (1526-1857 CE) empires is a manifestation that gave political Unity in India. Had
British not been the first to take advantage of India’s disorder with deceit, it may have been
possible that an Indian ruler would have accomplished dynamic economic and political order.
The 18th century India after Aurangzeb was in shackles. Whenever India was disunited and no
large empire, she was vulnerable to external aggression. It happened in many other countries
too e.g. South American kingdoms were disunited and defeated because they were
technologically inferior compared to the Spanish conquistadors and thereafter taken over. One
thing that could have prevented the Colonial rule is a strong Indian kingdoms with whom a
good number of other Indian kingdoms had a good relationship and an access to the nectar of
niti from the ocean of the Arthashastras.

Niccolò Machiavelli ,well-known to many, is perhaps a minor figure when compared to

Chanakya. Machiavelli’s writings are narrowly about how to capture and maintain power using
immoral means. In contrast, the focus of Kautilya’s Arthashastra is on governance. There is
occasional mention of conspiracy and spies, but only in the broader framework of maintaining
order. In the era of science and technology, the teachings of Chanakya are still relevant because
human responses to any situation remain more or less same. That is why reading Chanakya
augments vision on issues of strategy.

One of the theories which of late have captured imagination of every think tankers/policy
makers is a famous Raja Mandala theory of Chanakya which gave the administrators of that
time better understanding of the follies and deceit played by the external aggression. The four
components of the Raja Mandala theory are Ari (Enemies), Mitra(Friends), Madhyama
(Mediators) and Udasina(Neutrals). Hostile and friendly rulers are divided into two types,
natural and artificial. According to Chanakya, the king and his immediate neighbours are the
natural enemies (Ari) to each other. A king who gives trouble to another king without any
reasonable cause is an artificial enemy. According to Chanakya, Consistent straight forward
and whose friendship is inherited from one generation to another is a best kind of friend (Mitra).
A ruler whose friendship is courted for the sake of protection of life and property is the artificial
friend. The ruler whose territory is situated close to that of a king and his enemy and who was
capable of helping both the kings or of resisting either of them, according to Chanakya is a
Mediator (Madhyama) and the ruler whose territory is situated between the territories of two
rival kings and who is powerful enough to help or resist either of them or a mediating king is
Neutral ( Udasina) . The distinction between Neutral and Mediators are not very clear but
perhaps it means, the king who remains passive in regard to both the parties are Neutral while
Madhyama king is the one who exerted his influence to bring reconciliation. In contemporary
terms, it is amazing the how easily one can still view various dimensions of modern geopolitics
through 2,300-year-old theory prism.

“Arthashastra” and “Nitishastra” of Chanakya continue to guide the generations with his
wisdom. It would be appropriate to rest my write up with a quotation by Chanakya.
“The happiness of the commoners is the happiness of the King. Their welfare is his welfare. A
king should never think of his personal interest or welfare, but should try to find his joy in the
joy of his subjects.”
CHAPTER II: DISSECTION OF THE ARTHASASTRA
The Arthasastra has been divided as follows:
• The first five books deal with administration.
• The next eight focus on foreign affairs and defence and,
• The last two books shed some light on miscellaneous/ sundry issues.
The following are the fifteen Adhikaranas mentioned in the Arthasastra 14:
Book 1 "Concerning Discipline"
Book II, "The Duties of Government Superintendents"
Book III, "Concerning Law"
Book IV, "The Removal of Thorns"
Book V, "The Conduct of Courtiers"
Book V: "The Source of Sovereign States" Book VII, "The End of the Six-Fold Policy"
Book VIII "Concerning Vices and Calamities " Book IX, "The Work of an Invader"
Book X, "Relating to War"
Book XI, "The Conduct of Corporations"
Book XII, "Concerning a Powerful Enemy"
Book XIII, "Strategic Means to Capture a Fortress"
Book XIV, "Secret Means"
Book XV, "The Plan of a Treatise"
Since the project deals with Arthasastra and its contemporary relevance to the administration
of the state, the project will elucidate on the first five books, which deal with administration of
the state. The researcher will further dissect and analyse the relevant provisions of the
Arthasastra at a later stage