STATE IN ANCIENT INDIA | ECONOMIC FUNCTIONS - ANCIENT INDIA

STATE IN ANCIENT INDIA

Give an account of economic functions and social responsibilities of the state in Ancient India

Evaluate the role of the state in the ancient Indian economy

Short note on Economic functions of the Ancient Indian state

Shore note on role of state in economic life

Show how the ancient Indian state discharged its functions and responsibilities

 

State, in ancient India, had to play an important role in the administration and safe conduct of socio-economic affairs. The state itself took part in a number of activities demanding a close watch and control on sectors like trade, commerce, agriculture, handicrafts and labor problems.

Agriculture has been the chief occupation of India since early Vedic age. In the Pre Mauryan period agriculture was prescribed as the normal occupation of the Vaishya or the common man by the authors of the Dharmashastras. It was the task of the state to adopt a wise policy of encouragement and support to the cultivators of the soil.

Kautilya’s ‘Arthashastra’ helps us to draw the outlines of the policy of government encouragement to agriculture. Kautilya gives references relating to the law of agricultural holding (vastu). The Vastu or holding of the cultivator is defined as comprising tenements (griha), fields (kshetra), gardens (arama), embanked reservoirs (setubandha) as well as tanks (tataka) and other sources of water supply (adhara). The possession of vastu by the cultivator was safeguarded by a number of penal clauses. Thus, a forcible occupation of vastu is visited with the thief’s penalty. Robbery accompanied with violence in respect of fields, tenements and so forth was punished. Even the act of grazing cattle on another’s field without permission of the owner was punished with a fine.

From other clauses in the ‘Arthashastra’ we learn that the cultivators were entitled to the full rights of ownership, including those of sale, lease and gift over their holdings. Definite procedures were laid down for the sale of vastu, homestead lands, fields, gardens, irrigation works and of embanked reservoirs as well as for the lease of tenements, wells, tanks, rice fields and gardens. The transfers by gift of sale of fields within the rural area were required to be entered by the gopa in his field register of the village.

Choice of crop – In the choice of their crops, the cultivators were usually granted complete freedom. The only exception to this rule occurred in Kautilya’s program for lease of newly colonized lands to the cultivators and for raising extra revenue for the King in case of financial emergency. Neglect of cultivation was punished with cancellation of the lease. The ‘Samaharta’ (the chief revenue officer) was empowered to raise a second crop by the compulsory labor of the cultivators.

Encouragement of Agriculture – For the encouragement of agriculture the state adopted a number of measures. These consisted of the grant of agricultural loans and revenue remission to the cultivators and the construction of irrigation works by state agency or with state help. The loans as well as remissions were required to be entered by the gopa in his census of resident families of the villages. Revenue remissions were to be granted for five and three years respectively in favor of one constructing new and restoration of old or ownerless irrigation works. The interest of the cultivator was upheld by a clause of law exempting him from arrest for non payment of debt during the season of cultivation.

Agrarian Policy – According to Kautilya’s ‘Arthashastra’, the possession of land in the kingdom of Kosala carried with it the right of its disposal to buyers. The Dharmashastras contain clauses of law relating to the owners right over his tenants as well as to the lease holder’s obligation to the owner of the land. The field laborer’s obligations to serve his master was strictly enforced and a servant abandoning his work in tillage was to be flogged.

The Jatakas relate to the assignment of lands and villages by Kings. Such assignments were made in favor of members of the royal family, of Brahamanas, of officials as well as of private individuals of lower status. They appear to have been so well known that new technical terms were used to designate their different varieties. The assignees enjoyed the revenue of villages granted by the Kings probably in hereditary succession. We come across a class of ‘gramakhojakas’(village landlords) who exercised administrative and judicial powers by the king’s grant.

We learn from Kautilya’s ‘Arthashastra’ that the general policy of state administration was to discourage, if not forbid, the assignment of lands. There is mention of acquisition of land by members of the royal family, which were required to be entered by the ‘akshapataladhyaksha’ in his state register of the kingdom. On the other hand, the whole royal establishment consisted of members of the King’s family as well as of the civil and military services who were paid salaries according to their respective grades.

There are references in the ‘Artharshastra’ that some minor officials and Brahmanas were granted assignments of fields in the newly colonized rural areas. But the officers enjoyed their assignments without right of sale or mortgage. The Brahmanas alone were granted permanent rent free occupation of their holdings. It was also a fact that villages liable to military service in lieu of revenue were known at that time. the list of such villages were required to be entered by the ‘samaharta’ in his revenue role of villages in the kingdom.

Functions of rural officers – Describing the functions of the rural officers in the reign of Chandragupta Maurya, Megasthenes observes that they keep rivers improved and the land measured as in Egypt and inspect the closed canals from which the water is distributed into conducts in order that all may have an equal share. They collect taxes and superintend the crafts connected with land – those of woodcutters, carpenters, workers in brass and miners. From the description of the class of farmers by Megasthenes it appears that they were not only the most numerous, but the most highly respected class since they were exempted from military service and that they enjoyed the right of freedom in their farms.

Gupta Age – During the Gupta Period as well the state patronized agriculture. A concrete illustration of state care for agriculture is furnished by the Junagadh Rock Inscription of Emperor Skandagupta belonging to 445-58 of the Christian era. It records the restoration of the Sadarshana Lake at Girnar by the local governor of Skandagupta.

Industrial and commercial expansion – The first great age of industrial and commercial expansion in ancient Indian history can be traced to the pre Maurya period. The most complete development of the state policy in the industrial and commercial field during this period can be traced in Kautilya’s ‘Arthashastra’. A double attitude of the state towards the artisans and traders is found in his work. Special care was taken for the encouragement of trade and industry, as they were recognized as state’s greatest assets. A strict control was maintained over industrial workers as well as over traders for protection of the public against various malpractices current at that time among these classes. This was accompanied by an equally strict control of marketing operation in the public interest.

The state undertook a number of measures for the encouragement and security of artisans and traders. These included the opening of trade routes and the foundation of trade marts within the rural area and the settlement of artisans and dealers at specific sites of the metropolitan city. The king was directed to protect trade routes against various obstacles and danger. In the same spirit the ‘navahyaksha’ was required to treat with fatherly kindness boats that were strayed from their routes or damaged by bad weather. In particular, he was required to levy the custom duties at half their usual rates or even to remit them altogether on goods damaged by water. He was also required to destroy pirate boats. More important were the special laws laid down for protection of the property of the artisans and traders.

Punishment – The Arthashastra refers to the punishment for the theft of articles of small and high value belonging to artisans and traders. A number of police regulations were prescribed for making various officers personally responsible for the security of the merchants’ goods in course of transit within their respective jurisdictions. A number of rural officers such as the village headman, the officer in charge of pastures, the officer in charge of five or ten villages and the officer empowered to arrest thieves were required according to the distance to which the stolen articles have been carried to make good the value of their merchandise they were deprived of by a theft committed in the night.

The state took appropriate measures to control the artisans and traders for the purpose of ensuring honest dealings with the public. The dishonest practices of these classes, it appears, had become so notorious as to induce the moralists of this age to condemn them to punishment in hell after death. Kautilya’s measures form the subject matter of a chapter dealing with the subject of public enemies. A number of administrative regulations were directed against specific trades and professions branded as comprising men who are really thieves though passing as honest men. The measures comprised, firstly, the appointment of special benches of three magistrates (pradeshtas) for enforcement of law and regulations. Secondly, specification of the terms and conditions of work of the classes concerned along with penalties for their violations. Thirdly, fixing the rates of their remuneration and fourthly, an inquisitorial control over those classes.

There are references in Kautilya’s ‘Arthashastra’ regarding the state control over marketing operations. There were entrusted partly to the ‘sulkadhyaksha’ (officer in charge of the city custom house) and partly to the officer called pandyadhyaksha (officer in charge of merchandise) and samstahadyaksha (officer charged with control of stocks of dealers).

The ‘sulkadhyaksha’ had to collect custom duty on imported merchandise within the city limits and to arrange for its public sale at a fixed price. The ‘sulka’ had to be paid sometimes in cash and sometimes in kind according to the local usage. The rules in the Smrities suggest that the payment was usually in kind. Sometimes we come across inscriptions stating the actual quality of ghee, oil, cotton, betel leaves, etc., that was collected as customs duties in different places. Cash collections also were not unknown and they must have been usual in the case of imports of gold, silver and jewels.

Custom duties – Custom duties varied according to the commodities as in modern times. Manu recommends a 16% duty on fuel, meat, honey, ghee, scents, medicines, flowers, vegetables, earthen pots and leather goods. The ‘Arthashastra’ however, recommends a lighter tariff of four to five percent on medicines, fuel, leather goods and earthen pots. However, wines and silken pieces were charged a higher duty varying from 6 ½ to 10 %. It is clear that the tariff derived from province to province and age to age according to the needs of policy of different governments. Kautilya recommends that commodities intended for religious ceremonies and sanskaras like sacrifices, marriages, etc., as also presents given to the bride, should be exempted from the custom duties.

Ferry tax and shop tax – Along with eh customs duty, the ferry tax had to be paid for passengers, goods, cattle and carts. Besides some states used to test and stamp weights and measures and charge a small fee for the same. A shop tax is referred to in inscriptions. The 10% tax on sale proceeds referred to by Megasthenes is unknown to the ‘Arthashastra’ or the Smrities. Most probably the Greek ambassador confounded the customs dues with the sales tax.

The ‘panyadhyaksha’ was charged with the double function of controlling the home market for consumption of indigenous and imported goods and exploring the foreign market for pushing the sale of indigenous merchandise. In so far the home market was concerned this policy was designed to protect the public against unfair dealings by traders, while allowing the latter specific concessions. As for the foreign market the ‘panyadhaksha’ was expected to offer friendly advice and warning to the merchants engaged in export trade.

The ‘Samsthdhyakshas’ functions described appropriately enough under the caption ‘suppression of public enemies’ (literally, eradication of thorns from rural and urban areas) related principally to the protection of the public against the various malpractices of dealers.

The state collected various taxes and dues from the industry. As far as petty artisans like smiths and carpenters were concerned, it appears that they were usually required to work one or two days a month for the state. The central government usually transferred the right to receive the labor tax to the local bodies which could utilize it in carrying out their schemes of works of public utility. Inscriptions refer to this tax as ‘karukara’, the tax on artisans.

Trade in wine – Trade in wine was under strict state control. It was manufactured partly in state distilleries and partly by private agency. The wine prepared by the latter had to pay an excise duty of 5%.

Mines – All mines were regarded as state property. Some of them were worked by the government, but others were often leased out as well. When such was a case, the lease had to pay a heavy excise duty. According to Sukra it was to be a 50% in the case of gold and diamonds, 33 ½ in the case of silver and copper and 16-25% in the case of other metals.

Salt – Excise duty was levied on salt. Salt deposits could be worked only by the state or its licensees. Copper plate grants donating villages usually invest the donee with the right to dig for salt and metals without the payment of any fee.

Calamities – Apart from the usual taxation, the state was naturally empowered to levy extra cesses to meet unforeseen calamities, or to finance costly works of public utility, or to carry out its plans of ambitious expansion. The Arthashastra describes these extra contributions as ‘prayanas’ or benevolences and lays down that the farmers may be called upon to pay about 25 and merchants from 5 to 50 % according to their circumstances.

According to the description of Megasthenese, the ‘astynomoi’ (the city commissioner or the magistrates in charge of cities) in the time of Chandragupta Maurya were divided into seven boards of which three are mentioned here.

The first board had to look after arts and handicrafts, the fourth board was in charge of sales and barter and had to look after ‘measures and the fruits of the season’ so that the latter might be sold by stamp. The fifth board had the charge of the work done by artisans. According to the parallel account of Kautilya we find that the control of artisans and traders in urban as well as in rural areas by means of elaborate laws and regulations was entrusted to benches of three ‘pradeshtas’ for the purpose of protection of the public against the malpractices of the artisans and traders.

Promotion of trade: The state took keen interest in promoting trade. The first known reference in the ancient history of India to the construction and maintenance of trade routes by the state is found in Kautilya’s ‘Arthashastra’. The trade routes were looked upon as an asset of the state. It is said that the possession of land and water routes counted among the characteristics of a good ‘janapada’. Kautilya mentions about a few concrete steps to be taken by the state in pursuance of this aim. The construction and security of trade routes was associated with the foundation of villages in Kautilya’s program of development of the wastelands. In another place Kautilya mentions about the foreign policy aimed at the possession of trade routes. By the time of Chandragupta Maurya, as we learn from Megasthenes, a great royal road had been built for linking Pushkaravati, beyond the Indus river, with Pataliputra the imperial capital. The Mauryan rulers took extreme care for the improvement of transport and communication. From the observation of Megasthenes we learn that the rural officials were required to mark roads with pillars at every ten stadia to show the distances.

Loans – One aspect of development of economy during the pre-Mauryan age is the extensive use of agricultural, industrial and commercial loans to which the records of this period bear witness. This led for the first time in India’s history to state regulations for fixing the legal rate of interest in general and on a graduated scale. The legal rate was made sufficiently elastic to allow the increase of the prescribed rate or rates upto a fixed limit.

Capitalistic system: The capitalistic system of production was a well established institution during ancient times together with the age old domestic system.

Agricultural Production Standard: The standard of agricultural production was fully developed in the working of the state farms of which we have a detailed description in Kautilya’s ‘Arthashastra’. We may trace this development firstly, in the technical qualification of the controlling staff, secondly, in the larger provision for agricultural labor and the appliances of cultivation, thirdly, in the application of the most advanced scientific agriculture of the time for sowing the seeds, fourthly, in the precise rules for the payment of wages of the laborers and lastly in the precise terms of the share of the crops allowed to the lease holders.

Domestication of animals: The first complete description of the state rearing of domestic animals is given by Kautilya. Draught animals were required for providing transport for civil and military purposes. In the layout of the metropolitan cities sites were set apart for stabling the cattle, horses, asses and camels belonging to the royal establishment. Two separate ‘adhyakshas’, functioned for the management of state herds. These were by ‘goadhyksha’, who was in charge not only of the cattle but also of camels, asses, goats and sheep belonging to the category of the state herds. The other was the ‘asradhyaksha’ who was in charge of the horses and mules.

Forests: Forests formed another important source of the state income. Kautilya includes forests as a separate item in his classification of sources of revenue. The economic products of the forest consisted according to Kautilya’s enumeration of the sub-types called the group producing hard wood, the bamboo group, the plant group, the group which produces ropemaking, paper manufacturing, dyeing materials and medicinal substances, the group which provides poisons, the remains of dead animals, base materials, bamboo and earthen ware.

Mines and minerals: Kautilya gives a vivid description of the state working of mines and minerals. A high officer in charge of mines (akardhyaksha) was entrusted with the overall control and supervision of all the relevant operations from start to finish, while other ‘adhyakshas’ with technical titles were required to deal with different branches of the mining industry and trade in minerals. The ‘akaradhyakha’ and his staff were required to have expert knowledge of the metallurgical sciences. They were entrusted with the discovery of disused mines. While the costly mines were leased out on a share or royalty basis, the rest were directly worked under his supervision according to the best technical process known at that time. The ‘akardhyaksha’ had to set up workshops for carrying out smelting and other operations according to the elaborate techniques described by Kautilya. Thereafter he had to arrange for marketing of the finished goods under strict official control. Living by the manufactured products with a state license was punished with compulsory labor at mines. Theft of mineral products was punished with eight times the value of the stolen article that of jewels being punished with death.

Textile Industry: The primary objective of the state textile factories was to produce fabrics for the needs of the civil and military administration. Rules for the working of the factories are laid down in the ‘Arthashastra’. Skilled male as well as female labor was employed for the operations of spinning and weaving. A special officer called ‘sutradhyaksha’ was incharge not only of spinning but also of the weaving operations.

Sale of state merchandise: The first known state trading, as of the state industries in ancient India occurs in Kautilya’s ‘Arthashastra’. According to Kautilya’s description the ‘panyadhyaksha’ (officer incharge of merchandise) had the task of promoting the sale of the state merchandise to the best advantage of home and abroad. He was to have a thorough knowledge of current market conditions. In so far as the home market is concerned he was required to collect the merchandise in excess of supply at one place for realization of its proper price and later to lower the price.

Marketing: Marketing of state merchandise of local manufacture was centralized. The state merchandise was to be sold at a fixed price to licensed dealers who were to be fined for lowering the price apparently for the purpose of attracting a larger number of customers. As regards foreign market, the ‘panyadhayaksha’ was to consider the differences in price levels of the local and the imported merchandise and to make a series of calculations for estimating the margin of profit likely to accure from the sale.

Weights and balances: There was an elaborate system of weights of balances, liquid and linear measures and measures of time. attempts were made to a standardization in the advanced state of administration of time. a state factory was set up for the manufacture of weights and measures and a special officer called the pautavadhaksha’ was placed in charge of the same. The weights were to be manufactured out of iron, or stone belonging to a particular locality, or of wood of a particular texture, while wooden vessels of a particular design and material were to be prepared for liquid measures. The inspection of weights and measures was to be carried by the ‘pauravadhyaksha’ every four months. A series of balances was manufactured so as to give a maximum advantage to the state in the collection of its dues.

Regulation of Coinage: The first clear account of state regulation of coinage occurs in Kautilya’s ‘Arthashastra’. According to Kautilya, the coins were struck by state authority. The work was entrusted to a special officer called ‘Lakshanadhyaksha’. Both silver and copper coins were issued. The silver coins were known as ‘ruparupya’ and copper coins were known as ‘tamrarupys’. Reference is made in another context to the manufacture of gold as well as silver coins, named respectively as ‘suvarnas’ and ‘dharanas’. The mint regulations were sufficiently precise.