Kautilya's Arthashastra is an important source of knowledge on polity, economy and administration. However, this important document had been forgotten for centuries. Thanks to Syamasastri, who first interpreted Kautilya's economic and political thoughts in a book published in English in 1909, we had insights into the writings of that brilliant mind. Since then, a large number of scholars and ideologists from the East and the West studied the book and found that it was a fascinating source on the ancient Indian political system, economic activity and administration, both public and private.
The authenticity of Kautilya's period, the role he played as Prime Minister to put an end to the evil regime of the Nandas and create a new rule under Chandragupta Maurya, has been confirmed by scholars the world over. Kautilya's Arthashastra is basically a book on governance. Political administration and economic administration for good governance are its important aspects. However, the book includes a large number of subjects related to social, political and economic aspects of life. It is an interdisciplinary work running over several chapters, comprising 6000 Sanskrit verses.
The Arthashastra is more a practical guide meant for kings than a theoretical composition. The Arthashastra is a tome on how the King should rule and what aims he should strive for. Kautilya knew the drawbacks of an evil ruler. He knew that even the strong republics that existed in India and later succumbed easily to Persian and Greek invasions, fell primarily because of maladministration. He realised the need for creating a strong and centralised monarchy benevolent to the people. He could visualise the realisation of a strong normal rule in place of an evil one. He succeeded in creating an ideal state ruled by an ideal king, Chandragupta Maurya. He administered the kingdom as Prime Minister and then wrote the Arthashastra as a guideline for the benefit of the King.
The relevance of Kautilya's Arthashastra to present day India and, indeed, the whole world need not be doubted. The work is relevant in many ways. For example, governance in general and good governance in particular are the most relevant aspects. Those on an endless search for good governance can expect a treasure trove in the Arthashastra. A number of modern thinkers, from Hobbes to Rawls, including Gandhi and Marx believed that human beings conceded coercive power to the state only in the hope of realising good governance. Kautilya's treatise on the art of government and administration, the duties of kings, ministers, officials and art of diplomacy is a guideline on good governance.
The King is expected to behave in a righteous manner. "In the happiness of his subjects lies his happiness, in their welfare, his welfare. Whatever pleases him personally he shall not consider as good but whatever makes his subjects happy he shall consider good."
Elsewhere Kautilya maintains, "the King should look to the bodily comforts of his servants by providing such emoluments as can infuse in them the spirit of enthusiasm to work. He should not violate the course of righteousness and wealth. Thus, he shall not only maintain his servants, but also increase their subsistence and wages in consideration of their learning and work."
For Kautilya, artha (wealth) followed dharma (righteousness). Artha has a wider connotation than mere wealth; the material well-being of a person being only a part of it.
Good governance in Kautilya's mind was aimed at the welfare of the people. The principles of good governance in Kautilya's Arthashastra are well-drawn out. The King has no individuality. His duties merged into his personality. He himself was one of the organs of the state, albeit the most important organ. In Arthashastra, polity and society are merged and both are restrained.
In good governance, the objectives of the state are to be fulfilled and realised. This is possible through a properly organised and guided administration. This principle is relevant even today. A government is good, if it is administered well. Kautilya suggests that good governance should avoid extreme decisions and extreme actions. Soft actions (sama, dana) and harsh actions (danda) should be taken accordingly. In what seems to be a very modern tone of voice, Kautilya opines, "Sovereignty is practicable only with the cooperation of others and all administrative measures are to be taken after proper deliberations." The King and ministers were supposed to observe strict discipline. Kautilya recommended a strict code of conduct for himself and for his administrators. This code of conduct is useful and applicable to modern executives.
Even 2400 years ago, Kautilya emphasised capping at a quarter of the revenue the salaries of the king and his officials. For good governance all administrators, including the king, were considered servants of the people. They were paid for the service rendered and not for their ownership of anything. Compare this to the expenses on the salary of government employees today, which constitutes over 50% of the revenue. In some states even 80% of the revenue is spent on salaries, wages and pensions.
It was the duty of the king to maintain law and order in society and to ensure protection of life, liberty, and property. Dereliction of duty in this respect had to be compensated from the king's property. In modern times, the problem of law and order has become very difficult. Protection of individual liberties does not seem to be always possible. And never, ever, would it be paid for by the personal property of the leader. A good deal of public money is spent on maintaining law and order. No progress and development is possible without law and order administration.
Ministers and secretaries are directly responsible for administration. They must be selected with great care. Their abilities must be tested before their selection. They should be tested according to the jobs they will be assigned. Their abilities and sincerities should be tested from time to time. All these measures are relevant to the civil servants in present administration.
Kautilya also deals with the problem of corruption, in fact he points out about 40 ways by which government funds can be embezzled. However, Kautilya has a very realistic perception about dealing with this malaise. He feels that it is difficult to discover the honesty, or otherwise, of an officer. According to Kautilya, for good governance preventive and punitive measures to punish corrupt civil servants must be adopted.
Good governance and stability go hand in hand. If rulers are responsive, responsible, accountable, removable, recallable, there will be stability, if not, there would be instability. This is very essential in the present democratic set up. As in Kautilya's monarchical set up, similar qualities are required in our rulers and administrators.
The Arthashastra equates political governance with economic governance. The end is economic governance while political governance is the means. But as economic objectives are not realised 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 and Machiavellian philosophy. Political power and material wealth according to Kautilya 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. Good governance is fundamental to the Kautilyan idea of administration. Judging by the countless governance scandals that are uncovered nearly every day in India, a reading of Arthashastra, and imbibing its principles, ought to be the topmost priority for our leaders, both political and corporate.